The tariff offensive led by Donald Trump since his return to the White House has quickly shifted into a face-off with China. Following a cycle of announcements and retaliation, the extra-tariffs applied by the United States to China amount to 145%, compared to 125% in the opposite direction. The shock is of unprecedented magnitude, and the two superpowers are engaged in a negative-sum game.
Since June 2022, the U.S. Federal Reserve has largely reduced its holdings of U.S. Treasury debt as part of its quantitative tightening program, or QT, after having massively expanded them between March 2020 and May 2022, as part of its quantitative easing program, or QE.
