Joe Biden’s Asian Bankers Wonder If Their $3.5 Trillion Is Safe

Joe Biden’s Asian Bankers Wonder If Their $3.5 Trillion Is Safe

Asia's central bankers never quite got over that day a decade ago when history's biggest trade nearly went awry.

In August 2011, Standard & Poor's did what Asian officials hoped it never would: yank away Washington's AAA credit rating. Suddenly, lending more than $3.5 trillion to Washington, by way of U.S. government debt, seemed like a terrible idea.

Luckily for Asia, S&P was an outlier. Neither Moody's Investors Service nor Fitch Ratings followed its move to downgrade the world's biggest economy. S&P acted out of concern about Republicans and Democrats squabbling over the ceiling on the Treasury Department's ability to borrow. Moody's and Fitch let America's AAA status ride.

Then came Donald Trump, whose political wreckage leaves new U.S. President Joe Biden with a giant trust dilemma.

Trump entered the White House in 2017 with policy priorities that were more the stuff of Argentina than a Group of Seven power. For years before entering office, Trump complained about exchange rates he believed Asia used to steal U.S. jobs. On the campaign trail, he'd hinted at defaulting on U.S. debt.

"I would borrow, knowing that if the economy crashed, you could make a deal,“ Trump told CNBC in May 2016. "And if the economy was good, it was good. So therefore, you can't lose.“

In the