Now, one of the ways that China has been touted of hitting back at the USA is via selling off some of it's $1 trillion in USA debt.
The heightened tensions over the weekend unwound gains in risk assets from late Friday as optimism over progress between the two sides faded.
European stock markets staged a fightback Tuesday, rebounding from losses that had been sparked by the raging US-China trade war. Hong Kong is closed Monday for a holiday. That has increased fear in markets that any further escalation could seriously jeopardise the global economic recovery before numerous world's central banks have had a chance to normalise monetary policy.
If tomorrow's data out of China is reported roughly in line with expectations and does provide any new cause for concern, markets might possibly witness spot USDCNH continue its advance still. "With the breakdown of these trade negotiations people will have to sit back and think how far this dovish central bank stance can really continue to carry us".
Traders are on tenterhooks, digesting a slew of details from the weekend that are seeing investors favor safer-haven assets and could mean more volatility as the week progresses.
That is why President Donald Trump should not only tell China to "bring it on" when it comes to dumping treasuries, he might also consider having the U.S. Treasury label China a currency manipulator and bar it from purchasing any more treasuries.
"Whenever tensions emerge between the US and China, questions arise as to whether China would sell off its Treasuries in retaliation", said Mark Sobel, a former Treasury official and now USA chairman for the Official Monetary and Financial Institutions Forum.
China said it would impose higher tariffs on a range of U.S. goods, striking back in its trade war with Washington shortly after U.S. President Donald Trump warned it not to retaliate in the long-running trade dispute between the world's two biggest economies.
Also, Trump said he had a feeling talks with China will be "very successful" and that he meant to meet his Chinese counterpart Xi Jinping at next month's G20 summit. Other responses included introducing tariffs on US exports to China.
Germany's 10-year yield was unchanged at -0.07 per cent.
London stocks gained 0.9 percent in late morning deals. while Frankfurt won 0.5 percent and Paris rallied 1.1 percent in early afternoon trade.
Australia's S&P/ASX 200 Index declined 0.4 per cent. The underlying gauge rose 0.4 per cent Friday.
The yen rose 0.3 per cent to 109.61 per USA dollar.
The offshore yuan slid 0.4 per cent to 6.8744 per USA dollar.
The euro fell 0.1 per cent to US$1.1214.
The Aussie lost 0.3 per cent to 69.81 United States cents.
The yield on 10-year Treasuries fell seven basis points to 2.398%, the lowest since March 28. Commodities West Texas Intermediate crude fell 1.1% to $61.13 a barrel.Gold was steady at $1,297.54 an ounce.
At 10:05 GMT, June Comex gold is trading $1298.70, down $3.10 or -0.24%.