The beginning of the end, or the end of the beginning?

A trade deficit must be offset by financial inflows to maintain a minimum level of equilibrium.

The United States runs a significant and constant trade deficit, which they manage to finance through the sale of Treasury bonds, bought by China and other governments/central banks.

The deal is as follows and is an integral part of the trade strategy:

sell more goods to the United States and support their trade deficit by purchasing Treasury bonds. The recycling is almost perfect.

A subtle but notable shift has been occurring over the past few months, with these Treasury bonds primarily being acquired by private foreign investors seeking returns due to the current level of interest rates. However, these investors are not reliable as they will turn away as soon as the yields decrease.

Western leaders believe they control the situation and continually issue criticisms and demands towards China, which perplexes the Chinese since, after all, they are the creditors of the United States.

Observation:

the current sales of US Treasury bonds by the Chinese have reached record levels and could trigger a major fiscal crisis in the United States.

The Chinese are making a straightforward trade: US Treasury bonds for gold.

See for yourself the evolution of their reserves.

Possible consequences?

Some simple models suggest that the standard of living in the United States is about 27% too high relative to their trade deficit.