The US could simply default on any debt to China— which would also hurt them a lot, and frankly would help our crazy debt get under control. Like just stop paying the credit card— cause we can— and see how much more money we will have in our treasury, in exchange for cutting loose suicidal regimes. There would be loss of our plant space and technology- because dismantling and moving out would be difficult if not impossible. Thinking Boeing.
China’s holdings of U.S. debt have fallen to about $1.3 trillion from around $3.2 trillion.
Japan is now our biggest Debt holder.
Refusing to pay debt can have very negative impact on bonds or treasuries.
That would probably hurt us also.