This is astonishingly shortsighted, as the US can no more do without trade with China than China can do without trade with the US. Further, the US will unquestionably pressure its other trading partners (particularly the EU) to endorse and follow the sanctions. This they will not comply with, as it would serve to cut their own economic throats. The relationships between the US and their partners have been wearing thin in recent years, and the present threat against China is very likely to prove to be the final straw. The net effect would be to place the US out on an economic limb, alone.
There may be those who disagree with this premise, under the assumption that, to cut China out of the SWIFT system would destroy China’s ability to make international transactions, forcing them to cave to US demands.
However, China, Russia, and others have seen this day coming and have created their own SWIFT system, world cable network, and world banking system. All that’s needed to kick it all into gear is a major international need to bypass SWIFT. The US government has just provided that need with this threat. There would certainly be teething pains in getting the new system running on a massive scale, but the sudden worldwide need would drive the implementation.
This threat by the US at a time when it’s broke is, in effect, economic suicide.
But, just as the ink is drying on this announcement, the increasingly impetuous US president has cracked a deal with Democrats to permanently abolish the US debt ceiling. As the debt ceiling was the last safeguard in governmental fiscal responsibility, he’s effectively chosen to assure that the US will experience economic collapse.
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