The possibility that China may taper its purchases of U.S. Treasuries sends a message that America could pay a price for imposing new trade barriers. There’s been more tough talk than action from President Donald Trump’s year-old administration about cracking down on China’s unfair trading practices to reduce the deficit. But Trump is facing decision time as deadlines approach over whether to slap tariffs on imports from steel and aluminum to solar panels—which would be clearly aimed at China. China added to jitters on Wednesday as Bloomberg News reported that government officials are discussing whether to slow or halt U.S. bond purchases as part of a review of its foreign-exchange holdings. While China has about a fifth of all foreign-held U.S. debt at $1.2 trillion, making it the largest single holder, it’s not clear how much of a sustained impact a Chinese retreat would have on U.S. borrowing costs. The market for U.S. government bonds is becoming less attractive relative to other assets, and trade tensions with the U.S. may provide a reason to adjust the pace of purchases, the thinking of these Chinese officials goes, according to people familiar with the matter cited by Bloomberg. “Given possible U.S. protectionist measures, it makes sense for China to preemptively flag that it holds some important cards, which could restrain the U.S. actions,” Alan Ruskin, global co-head of foreign exchange research at Deutsche Bank, said in a note. “It depends on how disruptive Trump’s measures are on trade, as to how much incentive there will be for China to show it can also hurt the U.S.” Even if China maintains its buying of Treasuries, a trade disruption with the U.S. could have the effect of reducing its demand for bonds. “If there are trade difficulties, then China will have fewer dollars flowing in and thus will have less need to invest those dollars in Treasuries,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.