China Orders Banks to Quit USD, Spain Sides with Beijing as US Trade Bloc Shows Cracks

China Orders Banks to Quit USD, Spain Sides with Beijing as US Trade Bloc Shows Cracks

A single phone call in Beijing shattered the silence—no headlines, no press briefings, just one cold command: stop buying US dollars. Within 48 hours, Spain inked a historic deal with China. A multi-billion-euro partnership bypassing NATO, bypassing Washington—marking a turning point in the global economic order.
On April 7th, deep behind closed doors, Beijing’s top banks received orders from the People’s Bank of China: freeze dollar liquidity, settle trades in yuan, exit dollar exposure. This wasn’t symbolic. It was strategic warfare, launched just two days after Trump escalated tariffs and sent US bond yields surging.
China’s $24 billion sell-off in US Treasuries in March—the sharpest since 2018—wasn’t noise. It was a clear, calculated message. And Spain? They didn’t hesitate. They welcomed Chinese capital with open arms, handing Beijing the keys to green energy, logistics hubs, and rare earth sectors. Valencia alone will soon host BYD’s $10 billion megaproject—factories, a battery gigafactory, and export terminals ready to ship to North Africa and beyond.
As Trump slapped 100% tariffs on European EVs, Spain made its choice. Former EU Trade Commissioner Cecilia Malmström put it bluntly: loyalty is now transactional.
But China wasn’t stopping at Spain. Its exports to the Global South soared over 42% in March, and to US allies like Mexico and Spain by over 20%. Goods rerouted through Vietnam, Cambodia, and Mexico evade US tariffs, quietly flooding American markets. Wall Street watches nervously. Goldman Sachs warns: a retreat in Chinese dollar demand could detonate global turmoil.
Meanwhile, countries like Japan and Australia publicly back Washington—but their trade behavior says otherwise. Australia’s lithium exports to China spiked 21%, Japan’s semiconductor imports from China rose over 11%. France’s Airbus doubled Chinese procurement. Even America's retirement funds—managed by BlackRock and Vanguard—are deeply entangled with blacklisted Chinese firms.
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Back home, it’s hitting hard. Inflation is rising, wages are flat, and small businesses are choking on tariff costs. Foreign investors are dumping US debt—$138 billion worth in Q1 2025. The 10-year Treasury yield spiked to 4.89%, lifting borrowing costs across mortgages and corporate loans. The Congressional Budget Office warns: every 1% rise in rates could cost the US $2.2 trillion in debt.
So now we ask: if the dollar weakens, if foreign investors flee, if allies hedge their bets—what’s left holding the line?
This isn’t just a trade war anymore.
This is economic warfare. And it’s already begun.

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