The Trump administration amid the U.S.-China trade war is apparently examining the "loony" idea of going to Beijing with century-old debt obligations.
Owners of 100-year-old Chinese bonds have been asking President Trump to get Beijing to honor them, Bloomberg reports, with the administration currently "studying" this "unlikely prospect." This debt hasn't been recognized by the People's Republic of China, but Trump, Treasury Secretary Steven Mnuchin, and Commerce Secretary Wilbur Ross have reportedly held meetings with bondholders to discuss it.
In fact, Jonna Bianco, who is leading an organization that's been lobbying Trump in hopes that these bonds can become an unexpected tool in the U.S.-China trade war, suggested to Bloomberg that these debt obligations adjust to about as much as the U.S.' $1 trillion debt to China. "What's wrong with paying China with their own paper?" she asked.
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Still, Duke University law professor Mitu Gulati told Bloomberg that "I think everyone who works for Trump at the Treasury Department thinks this is loony," although Gulati couldn't help but be intrigued, "because at a legal level these are perfectly valid debts." So could the U.S. really gain an upper hand in its trade war with China thanks to a bunch of people riffling through their attics looking for dusty old pieces of paper? Probably not, but for 2019, it sounds about right.
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