Friday’s caustic tone and sudden escalation brought into focus the possibility that this trade war has the clear potential to spiral precariously out of control. Will President Trump move forward with measures that would force U.S. companies to retreat from China? Might the Department of Treasury intervene in the currency markets? Could the U.S. further ratchet up sanctions on Chinese companies? What impact will this latest escalation have on already shaky Chinese financial stability? How much closer is China to using its huge trove of U.S. Treasuries to make a point?
