Selling U.S. Treasuries would be China’s “last defense” if the White House pushes Beijing too hard on trade, said Stephen Roach, former non-executive chairman for Morgan Stanley Asia.

“The Chinese side knows this is an option they have,” Roach said in a Bloomberg Television interview on the sidelines of the China Development Forum in Beijing. “If we keep pushing China, and clearly threatening to damage their economy and their growth outlook, China will view this is an active economic war and respond in kind.”

China’s early responses to U.S. tariffs and other trade threats have been “judicious and modest,” said Roach, now a senior fellow at Yale University and author of the 2014 book “Unbalanced: The Codependency of America and China.” Beijing last week unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by the U.S.

The U.S. committed a “very serious policy blunder motivated by politics, not economics,” because it has a trade deficit with more than 100 countries and the Trump administration is scapegoating one to address those imbalances in the name of helping the middle class.

“It’s not going to work,” he said. “Chinese peers will just go to other producers and that will end up taxing the people he’s trying to protect. There’s really not a great appreciation of economic policy analysis in the Trump administration, and given the changes they’re making in their advisory team, it’s going from bad to worse.”