[gpm]

A) I'd suggest that there are a wide variety of options here, reciprocal actions are common in diplomacy, so for instance the US could default on an equal amount of US debt that China holds, or perhaps pass a law that in the case of the bankruptcy of US companies bonds owned by Chinese nationals at any time after the proposal of said law (to avoiding them just selling them) are void.

Of course these options (and probably any other options you imagine) would have pretty wide reaching side effects - to the extent that I'm not even sure they are worth the cost - but they definitely exist.

B) Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade.

[whimsicalism]

The United States government defaulting on any amount of its debt would be really really really stupid policy.

> Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade.

I am not convinced apriori that this is the case, and don't feel comfortable having politicians who definitely have no clue whether that is the case making the calls.

[Robotbeat]

> The United States government defaulting on any amount of its debt would be really really really stupid policy.

Also arguably unconstitutional

[viro]

>Also arguably unconstitutional

Umm how?

[shagie]

The 14th amendment, section 4.

https://constitution.congress.gov/browse/essay/amdt14_S4_1_1...

https://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_Un...

[scoopertrooper]

The market has a way of dealing with this. Chinese corporate debt is currently trading for pennies on the dollar. Chinese companies are going to be essentially locked out of global credit markets for the foreseeable future.

[shagie]

> for instance the US could default on an equal amount of US debt that China holds

https://constitution.congress.gov/browse/essay/amdt14_S4_1_1...

> The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The US defaulting on any debt is unconstitutional.