Understanding the Dollar Risk in U.S.-China Trade Tensions

There’s been growing chatter in the media about China threatening to step away from the U.S. dollar—what experts call “de-dollarization”—or even selling off its massive holdings of U.S. Treasury debt. These rumors usually surface when trade talks between the U.S. and China heat up. But despite the headlines, these actions are highly unlikely in the near future. For investors, this ongoing uncertainty highlights a serious dollar risk — one that could affect markets, savings, and retirement plans.

The Global Dependence on the Dollar

For years, China has been pushing to boost the global role of its own currency, the yuan. It’s made moves to conduct international deals and large energy contracts in yuan instead of dollars. It’s also created financial systems like the Asian Infrastructure Investment Bank to promote the yuan.

Still, none of these efforts come close to replacing the dollar’s global dominance. Nearly 90 percent of the world’s currency transactions involve the dollar, and 80 percent of all global trade is priced in dollars.

In short, the dollar remains essential, even for a country like China. Walking away from the dollar would introduce massive inefficiencies and slowdowns to its trade engine. That’s the heart of the dollar risk—not just for America, but for China too.

China’s Treasury Holdings: Leverage or Liability?

China holds close to $1 trillion in U.S. Treasury bonds. At first glance, that might seem like a powerful weapon in trade negotiations. But selling off these bonds would hurt China’s own economy more than it would hurt the U.S.

Why? Selling in large quantities would drive down bond prices and damage China’s own portfolio. On top of that, it would limit China’s ability to reinvest U.S. dollars in safe, liquid assets. With its economy already facing challenges, China isn’t in a position to absorb those losses.

This is another dollar risk—using dollar-based assets for political leverage can backfire hard.

The Currency Battle and Export Pressure

If China really wanted to punish the U.S., it might try to strengthen its currency against the dollar. But doing so would make its exports more expensive for dollar-based buyers—exactly the opposite of what its export-driven economy needs.

Instead, Beijing has strong incentives to keep the yuan weak and the dollar strong. This helps keep Chinese goods affordable and competitive, especially in the face of tariffs.

Protecting Your Retirement from the Dollar Risk

Trade wars, global debt, and financial posturing between superpowers are out of your control—but how you protect your savings isn’t.

A Gold IRA is one of the best ways to protect your money from the dollar risk. When paper currencies lose value or markets shake, gold and silver remain strong. These safe haven assets offer long-term security that doesn’t depend on political games or economic experiments.

At American Independence Gold, we help freedom-minded investors safeguard their wealth with real assets:

• Veteran-owned, standing for conservative values
• Lifetime custodian fees covered
• Secure partnerships with The Entrust Group and DSCC Delaware Depository

Call to Action

Secure your financial future today. Call American Independence Gold, a trusted gold investment company, at (833) 324-4653 to learn more about protecting your retirement savings.