US President Trump’s tariff on China’s 200 billion US dollars has risen to 25%, which has caused the US-China trade war to heat up again. Although China has not yet resorted to counter-measures, experts believe that Beijing still holds three major counter-attack weapons, including The depreciation of the renminbi, the sale of US Treasury bonds, and the refusal to purchase US soybeans, etc. But the measures have to be taken carefully, otherwise they may hurt China itself. Weapon 1: RMB depreciation China can offset the impact of US tariffs on the Chinese economy through the depreciation of the renminbi. However, Wang Tao, the chief Chinese economist at UBS, pointed out that the depreciation of the RMB in 2015 caused capital outflows and also weakened domestic confidence. So China may have concerns to use this weapon. Weapon 2: Selling US Treasury bonds China currently holds US$1.1 trillion in US Treasury bonds. As the biggest amount holder of most US debts, the reduction of US
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