China Will Strike Back: Scaramucci Predicts Currency War, IP Theft, Treasury Sell-off

Skybridge’s founder warns China is preparing fierce economic retaliation as the U.S. slaps 125% tariffs on Chinese goods, signaling currency shocks, massive stimulus, and financial warfare.

Scaramucci Outlines 5-Point Forecast on China’s Next Moves Amid Rising Trade Tensions

Skybridge Capital founder Anthony Scaramucci issued a strong critique Monday on social media platform X, warning that the United States’ current approach to China risks alienating allies and strengthening Beijing’s position.

His remarks were in response to financial blog Zerohedge, which suggested that China faced three possible responses to rising U.S. trade pressure: (1) concede to all demands made by Donald Trump, (2) devalue the yuan by 20%–40%, or (3) initiate a massive $2 trillion–$3 trillion fiscal stimulus that would significantly expand China’s national debt. Scaramucci dismissed the first option as implausible and predicted the remaining scenarios were more realistic.

In his reply, Scaramucci laid out a detailed five-point forecast. “#1 will never happen,” he stated, rejecting the idea that China would capitulate to Trump’s terms. He continued: “#2 + #3 are coming,” referring to yuan devaluation and massive stimulus as likely responses. Scaramucci added two more anticipated outcomes: “#4 they’ll dump U.S. treasuries. #5 they’ll accelerate IP theft.” He concluded with a warning against undermining international alliances:

It’s OK and bipartisan to take on China. But it makes no sense to simultaneously antagonize global allies geopolitically + economically, driving them into China’s arms.

Scaramucci, who briefly served as White House communications director under President Trump during his first term, has criticized Trump’s tariff policies, warning they could lead to a recession and disproportionately affect low-income Americans. While he acknowledged the need to address the U.S.-China trade deficit, he criticized Trump’s unilateral approach and advocated for more targeted policy measures.

The critique followed a White House announcement of a cumulative 104% tariff on Chinese imports, in response to China’s 34% tariff on U.S. goods, which the Trump administration called a “big mistake.” On Wednesday, China raised tariffs on U.S. goods to 84% following new “reciprocal” duties imposed by Trump, further escalating trade tensions. Trump subsequently announced via Truth Social an immediate increase in tariffs on Chinese goods to 125%, citing continued trade abuses and market barriers by Beijing. He also confirmed a 90-day pause and a reduced 10% reciprocal tariff for over 75 countries currently in trade discussions with U.S. officials, noting their lack of retaliation as a reason for the temporary relief.

U.S. Treasury Secretary Scott Bessent recently underscored the lopsided trade relationship, noting that American exports to China totaled $143.5 billion, while imports from China reached $438.9 billion. Beijing responded defiantly, vowing to “fight till the end” and labeling the U.S. move as coercive and unreasonable.