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The latest evidence that last year’s critical minerals meeting between Donald Trump and Xi Jinping in Busan might not have secured a newfound peace after all: Even ahead of a planned meeting between Trump and Xi in April, Bloomberg reports indicate China has asked its banks to drop exposure to U.S. bonds.
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(When I say “bonds,” if you want to nitpick, the right word is actually “treasuries,” but seeing as people call those ‘T-bonds’ sometimes, I’m just going to use the word bonds. Surely, you get the idea.)
The move also comes about a week after Trump and Xi Jinping had their first (publicly known) phonecall of 2026. In a Chinese government press release outlining that call, generally paints a picture of civility.
And now this. This report came out on Monday U.S. time; overnight, we saw the USD drop and bond yields inch higher. (Bond yields going up is generally seen as a loss of faith in economic confidence for the issuer; higher yields are meant to bring people back to market, instead of reflecting growth.)
So far, we’ve heard nothing from Trump on the media or on his own preferred dissemination channel, his Truth Social account. But as Trump and Xi tell the world their relationship is fine, as they talk on the phone and as Trump prepares to meet Xi in less than two months, there are obvious cracks in this story.
For one, what Trump has used Truth Social for is to attack Canadian Prime Minister Carney for entering into an economic deal with China, which Trump said will ‘eat’ Canada. In fact, he even claimed that ‘the first thing China will do is eliminate ice hockey.’ At least they aren’t eating the dogs and cats.
And in the background, European leaders have been courting (or getting courted by) China. It was Finland and France in December, the U.K. earlier, and the German Chancellor is set to head over to meet Xi in the coming months, too.
That is likely making Trump twitchy, and this latest call from Xi is likely a reminder, from Xi, of China’s own ability to swing markets. Because right now, all Trump is talking about is the Dow Jones hitting a record high, and the US President is now giving the oldest bourse a price target: 100,000 by EOY.
He also sees the economy growing 15% under Warsh. No pressure.
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