US Economy Crippled by $390 Billion Sell-Off of Treasuries by Allies: Retaliation to Trump Tariff?

US Economy Crippled by $390 Billion Sell-Off of Treasuries by Allies: Retaliation to Trump Tariff?

US Economy Crippled by $390 Billion Sell-Off of Treasuries by Allies: Retaliation to Trump Tariff?

You might have heard people say that countries like China and Japan own a lot of U.S. debt. It gets mentioned in news headlines and political debates, but what does that actually mean? Why would other countries be so interested in lending money to the United States? And what do they get out of it?
Let’s start with the basics. When the U.S. government needs money to fund things like infrastructure, defence, education, or social programmes, it doesn’t just print more cash. Instead, it borrows that money by issuing what are known as U.S. Treasury securities. These are essentially promises — IOUs — where the government says, “We’ll pay you back with interest.”
Now, these securities aren’t just bought by American citizens or institutions. Foreign countries — through their central banks or sovereign wealth funds — also purchase large amounts of U.S. debt. As of early 2025, two of the biggest holders of U.S. Treasury securities are Japan and China. Japan currently holds about $1.079 trillion, while China’s holdings sit at around $760.8 billion. Despite fluctuations, these two nations have consistently been at the top of the list for many years.
But why? Why would a country decide to lend hundreds of billions of dollars to another country, even if it’s the United States?

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