China has a $1 trillion trade war weapon. Will it ever use it?
In the US-China trade war, it's been a week of rapid escalation. Beijing devalued the yuan after the Trump administration threatened to slap tariffs on just about every Chinese export. The United States then labeled China a "currency manipulator," deepening the rift. The exchanges have rocked global markets and threaten the global economy. What happens next is anyone's guess. China has said it is prepared to fight, if necessary. And it has one hugely powerful weapon up its sleeve: it's the American government's biggest creditor.