Commentators are highlighting the amount of US Treasury bonds held by foreign countries (“Trump’s trade policy adds a political risk premium to US assets”, The Long View, FT Weekend, April 12).
The focus is on China, notably, and more recently Japan which has moved into pole position as the largest holder of US Treasuries. Europe barely gets a mention, however just five EU countries — Germany, France, Ireland, Belgium and Luxembourg — together hold $1,558.2bn of US Treasury debt.
Add Norway and the UK and the number rises to $2,471.5bn held by seven European nations which is more than three times the amount held by China and more than double the amount held by Japan.
Two good reasons for holding the government debt of a foreign country are, first, if it is a strong and committed military ally and, second, if that country is a substantial trading partner. From a European perspective the Trump administration has called both…
