US Stock Market Loses $1.7T after Japan Ditches the Dollar: U.S. in Emergency

U.S. Commerce Secretary Howard Lutnick has announced that the Trump administration will impose a 25% tariff on all auto imports from Japan, including passenger vehicles. In response, Japan initially sought a diplomatic resolution, but their backup plan was far from conciliatory. The Japanese Finance Ministry signaled a move toward diversifying economic ties, with the first step being a reduction in U.S. Treasury bond holdings. This decision, along with reactions from other nations affected by Trump’s tariffs, has led to a historic downturn in the U.S. stock market. But is Japan’s strategy truly impacting the U.S. economy, or is it simply a move to strengthen its negotiating position? Let’s explore how Japan came to hold U.S. bonds in the first place.