Rising federal bond yields make them a better investment, more or less by definition, unless you're genuinely worried about default.
But that said, I don't think (again, sort of definitionally) there is a "best strategic hedge" in the face of a trade war. In trade wars everyone loses. You can't meaningfully bet against a shrinkage of the global economy in aggregate.
I haven’t viewed default as a real risk beyond some true craziness happening like the U.S. willfully deciding to default on a payment. Better yields are a good incentive to buy bonds now but they simultaneously lower the value and desirability of exiting bond holdings. They’re also correlated to inflationary risks, so I guess it depends on your outlook on the future of the dollar too.
> I haven’t viewed default as a real risk beyond some true craziness happening like the U.S. willfully deciding to default on a payment.
Well there are many ways to default, and many shades of default.
I can very well see the current administration argue that China, for whatever reason, owes the US, and thus should be compensated by confiscating bonds.
But that said, I don't think (again, sort of definitionally) there is a "best strategic hedge" in the face of a trade war. In trade wars everyone loses. You can't meaningfully bet against a shrinkage of the global economy in aggregate.