Joseph Lawler of the Washington Examiner identifies one major weapon that would help China in a trade war with the United States.

If a major trade war breaks out between China and the U.S., the Chinese government has a major weapon in the $1.2 trillion in Treasury securities it owns.

As President Trump has traded tariff threats with China in the past weeks, some economists and investors have raised the prospect of China eventually retaliating by dumping some of its vast holdings of Treasury bonds.

Such a move, in theory, would hurt the U.S. government by raising its cost of borrowing. Spiking Treasury yields also could cause disruption in financial markets.

While it’s unlikely that China would resort to such an assault, it’s a prospect that investors have been discussing, according to Donald Ellenberger, a senior vice president at Federated Investors, a Pittsburgh-headquartered investment manager.

The reason it can’t be ignored is that China has the largest portfolio of U.S. Treasury securities of any foreign nation. Japan is not far behind, with $1.1 trillion in holdings, but since 2008 China has typically been the bigger lender to Uncle Sam.

If China were to suddenly sell off Treasurys, the ensuing higher interest rates could, in theory, become a serious problem for the debt. Today, the Treasury pays relatively little in interest because rates are so low, even though the debt is high.