Here is how they will be delivered.
“They could recall the US debt we have to them.”
That would mean selling the US Treasuries that they hold - which would hurt them much more than us. If they try to sell too much, too fast, their price goes down and they lose value.
If they sold all their holdings, causing a temporary condition where not enough buyers remained for the US Government to finance its debt by selling Treasuries, the Federal Exchange Bank could just buy them all. They already hold several times as much as China. China can hurt the US Treasury market in the short term, but not long term.
US Treasuries serve like their dollar-based checking and savings accounts. They hold them largely because they have to, not to keep a sort of hostage.
They need dollar-based accounts to settle shipments at their ports. We can think of that, along with a few other expenses, like their checking account.
They also need some savings account of foreign reserve (especially dollars) to spend for big ticket items and emergencies - like rescuing their currency or stock markets if they go into crisis.
China is at much greater risk of having to oversell their US Treasuries to meet their expenses, than the US is at risk from China dumping Treasuries as a weapon of sorts.
They can't recall it. All they can do is sell it, and dumping a large amount of Treasuries into the market all at once would certainly do damage.
“They could recall the US debt we have to them. That would do some damage. “
Wasn’t there a movie about this in the early 70’s called, “Rollover”?
Wrong...... all they can do is sell the bonds
Here is how they will be delivered.
“They could recall the US debt we have to them. That would do some damage.”
They won’t. The last time they tried that they dumped 10% of their T-bills on the market and in doing so devalued the remaining 90% which hurt them more than it hurt us.
Is the US debt callable?