WINNING: China Is Out of Economic Ammo Against the U.S. “It has maxed out tariffs and other trade barriers, and selling Treasuries is ineffective.”

It isn’t all fun and games:

The agricultural industry has been hit especially hard. Farm bankruptcies are up 24% this year, and a report by the American Farm Bureau Federation finds that almost 40% of farmers’ income this year will come either from insurance payouts or government bailouts.

Nobody ever said trade wars are fun and easy — er, Trump did, which wasn’t his smartest statement ever — but the short-term pain for farmers ought to yield longterm benefits to our economy generally. And also improve our global position relative to China’s.

More:

The other big weapon in the Chinese arsenal is investment. The Chinese government is traditionally a major buyer of U.S. government debt, and it holds the second-biggest stash of Treasuries (after Japan). Over the years, many have fretted that a spat between the U.S. and China would lead the latter to sell off that mountain of debt, creating a world of hurt for the U.S. financial system and economy.

But this danger is vastly exaggerated for two reasons. First, as recent experience demonstrates, the U.S. simply doesn’t need Chinese government cash. In 2015 and 2016 China experienced one of the biggest capital flights in history, with about $1 trillion pouring out of the country. This resulted in a huge drawdown of China’s foreign-exchange reserves, most of which are U.S. bonds.

If the U.S. were heavily dependent on Chinese government financing, interest rates on U.S. debt — and by extension, throughout the U.S. economy — should have risen. Instead, they fell.

Washington’s addiction to debt is a problem, but for now anyway, there are plenty of lenders outside of Beijing. And economically decoupling from China should be — and seems to be — reassuring investors and lenders that Washington is getting at least one thing right.

On reflection, Washington hates this decoupling, as it reduces opportunities for corruption and graft. This is all Trump’s work, and so far it’s working pretty well.