European Countries’ Exposure to US Treasuries Is Small but Relevant
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Europe in Flux

European Countries’ Exposure to US Treasuries Is Small but Relevant

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Nearly a quarter of all US government debt, 24%, is foreign owned. Japan and China have pared back their US debt holdings since 2020 but remain the two biggest owners, followed by the UK. EU countries have increased their exposure to US debt since 2020, but their holdings are small in relation to their total assets, which has kept their exposure contained. US Treasuries have long been considered a “safe haven” long-term investment for many investors. Any market turbulence can be very contagious, so recent turmoil in the debt market serves as a reminder of the very real financial stability risks that trade wars can bring. 

Nearly a quarter of all US government debt, 24%, is foreign owned. Japan and China have pared back their US debt holdings since 2020 but remain the two biggest owners, followed by the UK. EU countries have increased their exposure to US debt since 2020, but their holdings are small in relation to their total assets, which has kept their exposure contained. US Treasuries have long been considered a “safe haven” long-term investment for many investors. Any market turbulence can be very contagious, so recent turmoil in the debt market serves as a reminder of the very real financial stability risks that trade wars can bring. 

Authors

Maria Demertzis

Maria Demertzis Maria Demertzis

Economy, Strategy and Finance Center Leader, Europ…
The Conference Board

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Matei Farcas

Matei Farcas Matei Farcas

Economic Research Assistant
The Conference Board

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