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How big is the chance that China will use its own currency – the yuan – as a countermeasure in the trade war with the US? In my view, the chance that China will do so is negligible. Another possibility to hit back and harm the US is by stopping to buy and/or selling US Treasuries. This could potentially wreak havoc on US interest rates, driving them much higher. What are the odds that Beijing will use this weapon of financial destruction?

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