According to the latest data, in March 2025, China decreased its holdings of US Treasury bonds, allowing the United Kingdom to surpass China and become the second-largest foreign holder of US Treasury bonds.
In March, foreign investors increased their holdings of US Treasury bonds for the second consecutive month, reaching a historic high total amount. Data released by the US Department of the Treasury on Friday, May 16, showed that foreign-held US Treasury bonds increased by $233.1 billion in March, reaching $9.05 trillion.
The latest data compiled by Bloomberg shows that this is the first time in over twenty years that the United Kingdom has exceeded China in the amount of US Treasury bonds held. In 2019, China was the largest holder of US Treasury bonds, but was later surpassed by Japan.
The data released on Friday indicated that there was no selling activity targeting US Treasury bonds before the market turbulence in April.
On April 2, US President Trump imposed “equivalent tariffs” on multiple countries globally, leading to selling of US Treasury bonds, the US dollar, and stocks for that month.
Countries such as Japan, the United Kingdom, Canada, and Belgium all increased their holdings of US Treasury bonds in March.
The data shows that Japan’s holdings of US Treasury bonds increased for the third consecutive month, totaling $1.13 trillion. The United Kingdom’s holdings rose to $779.3 billion, surpassing China’s $765.4 billion. China, on the other hand, net sold $27.6 billion of long-term US Treasury bonds in March.
Canada’s holdings of US Treasury bonds increased by $20.1 billion, reaching $426.2 billion. Belgium’s holdings increased by $7.4 billion in March, totaling $402.1 billion. Market analysts indicate that Belgium’s holdings of US Treasury bonds include custodial accounts for China.
The Cayman Islands, a popular registration location for hedge funds and leveraged investors, increased their holdings of US Treasury bonds by $37.5 billion, reaching $455.3 billion.
The Bloomberg Dollar Spot Index dropped by 1.8% in March and expanded nearly 4% in April due to market volatility caused by the global tariff threats from the United States. The 10-year US Treasury bond yield remained almost unchanged in March but surged from a low of 3.86% in April to a high of 4.59%.
Recently, with US and Chinese officials meeting over the weekend, both countries agreed to reduce tariffs, easing some concerns about the trade war. Earlier this month, the Trump administration announced a trade agreement with the United Kingdom, marking the first tariff deal reached by the US government since the start of the trade war in April.