Japan threatens to offload its $1 trillion US Treasury holdings if Trump trade talks don't go well

[Swede]

Holy Tokyo!!

Japan just pulled out the sharpest blade it’s got in the drawer — $1.13 trillion in US Treasury bonds. That’s what Finance Minister Katsunobu Kato waved in America’s face on Friday, right on national television.

Asked if Japan would ever use its role as the world’s biggest foreign holder of US government debt as a weapon in trade talks with President Donald Trump’s administration, Kato didn’t blink. He said, “It does exist as a card,” and tossed that line like a lit match. “Whether or not we use that card is a different decision.”

https://www.msn.com/en-us/money/markets/japan-threatens-to-offload-its-1-trillion-us-treasury-holdings-if-trump-trade-talks-don-t-go-well/ar-AA1E2Wkn

[spanone]

1. trmp is more dangerous than any terrorist could ever be.

K&R

[Initech]

7. He and his goons are literally doing to the United States what Osama Bin Laden only dreamed of.

[Doodley]

2. But Trump said he had all the cards. Oh wait! Trump lied!

[SCantiGOP]

14. Trump is incapable of lying

He long ago lost the ability to tell right from wrong, or to live in the world of reality.

[Abolishinist]

19. I totally agree.

He sees himself as a character in a novel, and not one written by him.

[sop]

32. Trump is a delusional liar.

It's not just other people he lies to, he also lies to himself, and he believes his own lies.

[NCDem47]

27. I was going to come on and say the same thing.

Shows his absolute LACK of understanding on anything.

Sure, we have the most weapons and toys, but others have lethal methods in their toolboxes too.

[Doodley]

45. He has been doing this all his life, bullying, lying, cheating, smearing to get his own way. Never occurred to him he

might face others that won't let him get away with it.

[Klarkashton]

3. Oops!

JFC with these maga assholes.

[Wounded Bear]

4. Yeah, who's got the leverage now, donnie?

[TnDem]

24. re: leverage

Not the Japanese, unless they plan on totally ruining their economy.

[boston bean]

42. And he destroys their economy with tariffs, they are left with nothing. They don't have to do the entire 1.3 T

to have a major impact.

[TnDem]

43. re: Japanese bond market

The US treasuries market is over 50 TRILLION dollars...The Japanese could burn all 1.3 Trillion they have and it would only cause a slight blip for the US economy. The Japanese economy would be on life support though.

[dalton99a]

5. No point in beating around the bush with the moron

[enid602]

6. Japanese

All this after Subaru and Nissan announcing the will shutter US manufacturing plants this year. The Japanese do play the long game.

[littlemissmartypants]

8. Declare war, get warriors. Oh, well. ❤️

https://allabout-japan.com/en/article/5818/

[Deuxcents]

9. Japan is not the only one who could do this..why doesn't his best ever in history economic team tell him this?

[slightlv]

10. Remember, this is not only trump, but straight

from the Heritage Foundation's P2025. I'm hoping there's some brain power in that foundation, someplace, to see what a zero game this is that they're playing. But I'm also afraid they'll fall into the "tit for tat" club and just destroy everything... all the while insisting (as they've done for years) that Conservativism can't fail, it can only BE failed. (sigh)

[Buns_of_Fire]

13. I was just thinking that. We know Krasnov isn't smart or

disciplined enough to consider this possibility, but surely there's a smart nazi in the Heritage Foundation who should've seen it coming.

[GoodRaisin]

17. The idea is for us to pay down the debt for the billionaires.

[slightlv]

46. Can't disagree.... in fact,

I view it as akin to the evil process that hedge fund managers use when they buy up a company. That inevitably leads to bankruptcy for the company. They want to keep us terrified, locked in our houses, and afraid to make a noise of any kind. Makes it easier to rule us that way.

[mjvpi]

12. That'll leave a mark.

[Permanut]

15. Glad to see Finance Minister Karo stand up to the schoolyard bully.

[Godot51]

16. Negotiations in ignorance.

Whether or not all, most, some, or none of these trade and tariff "ideas" belong to drumpf, he has embraced them.

He and his administration's lack of knowledge, understanding, coherence, and cohesion is telling.

[Norrrm]

18. At one time, Trump had the solution of defaulting on the national debt, a deadbeat business model he is personally famil

At one time, Trump had the solution of defaulting on the national debt, a deadbeat business model he is personally familiar with.

Great, Donald Trump Threatened To Default On The National Debt --- (2016)

https://www.huffpost.com/entry/donald-trump-default-national-debt_n_572d08e3e4b096e9f0917fac

A large portion of that debt is owned by Americans.

[mobeau69]

33. I was watching CNBC live when this happened on one of his call-ins. It was a jaw dropping moment.

After he hung up Becky Quick and winger Joe Kernen’s eyes rolled. It was like WTF? It demonstrated complete ignorance of the dollar’s role in international finance.

[no_hypocrisy]

20. Financial Pear Harbor.

[Bernardo de La Paz]

26. NOT a Financial Pearl Harbour

1) Not a sneaky attack: The Finance Minister discussed it on TV.

2) Not unprovoked.

[no_hypocrisy]

30. Points taken.

[Kaleva]

21. In order to sell, there has to be buyers.

[druidity33]

22. Musk, Thiel and Bezos...

could own our country for real. I'm sure they've got friends that could pony up too.

[Bernardo de La Paz]

31. There are always buyers. Selling the bonds simply causes US interest rates to rise.

Supply and demand. Many of those were purchased at higher interest rates. Any at lower interest rates would be sold at a discount for their current value.

There is demand for them because everyone expects interest rates to decline in the long term, especially if the US economy continues to contract like it did in the first quarter of this year.

When supply exceeds demand, the US has to raise interest rates on new issues (which happen regularly on a revolving basis to service US debt) so they can attract buyers.

[Kaleva]

44. One can imagine that the SS Fund and Federal Reserve being buyers

Last edited Sun May 4, 2025, 04:32 PM - Edit history (1)

[TnDem]

23. re: Japan T-bills

If Japan were to follow through with this, it would drive the bond markets crazy for a month and would complicate US interest rates....Then Japan would realize that they have committed financial suicide.

Selling the very investment that is tied up in most Japanese pensions, infrastructure loans and Yen stability, would be ruinous to Japan.

In other words, doing this would bruise our heel, but smash their head.

Remember the old wise saying...When you owe the bank $1000 and don't pay them, they own you...However, If you owe the bank $1 Trillion Dollars and don't pay them, you own them.

[Bernardo de La Paz]

34. It's not financial suicide, just a cost.

Japan would not sell it all in a single day. Nor all in a single month.

The bank (US Treasury by analogy) would not stop paying interest on the T-bills, which by your analogy is what the borrower does when they owe enough money to "own the bank". If the US did that, even momentarily, the US would not be able to finance debt and the US financial system would collapse. This is what has happened to Russia. Interest rates there are 18-20%.

Japan (and maybe others) would sell enough bonds to raise US interest rates substantially. The orange cry-baby has been demanding the Federal Reserve lower interest rates. But Treasury interest rates get set at auction. If there are more bonds in the open market (doesn't have to be the whole Japanese tranche), then they have to offer higher interest rates in order to attract buyers.

That would have a big effect on mortgage rates and since sales would be ongoing the effect would be long lasting.

If the Japanese sold 50% of their holdings over a period of a year, they might depress the value of them by (wild guess) 15%. That's less than the tariff rate.

[TnDem]

38. re: nope

Except it doesn't work like that at all...Japan does not hold enough bonds to make the US blink and what they do own would cripple them to use as a pry-tool to the orange ass.

If enough countries all simultaneously did that, and they were all willing to suffer even more of their own crippling domestic issues, then it might be possible to get the US attention... Japan doesn't hold shit in bonds to threaten this country...Also, the US pays for nearly their entire JDF, (Japanese self-Defense Force).

That's the sinister beauty of a US fiat petro-dollar....The whole world owns enough of our debt that they can't effectively devalue it without ruining their own economy.

[Bernardo de La Paz]

39. Except the US is devaluing the dollar. It has declined almost 10% vs Euro since January peak.

European stock markets have risen while US stock markets have declined.

[Autumn]

25. They should do it now.

[Grins]

28. The Pride of Wharton!! They must be so proud...

Can we FINALLY!!! put to rest the stupid that says the country should be run by businessmen?

If “our first MBA president” didn’t convince Americans of that, the orange failure monkey with 6 bankruptcies who has crashed markets and put the world on a financial precipice SHOULD.

Personal note: The ever present, ever faithful, deluded 28% will deny it and remain faithful like good little apparatchiks.

[Bernardo de La Paz]

35. Real businesspeople invest in their people. Ones who bankrupt casinos shaft their people.

If the US were run like a business, one of the top priorities would be to expand the Education department, not shut it down.

Single payer healthcare for all would be quickly brought in if real business people (not vulture capitalists) ran the US government.

Any corporation that is not being torn down from within and wants to succeed in the long haul and build real value invests in people.

"Run the country like a business" is not stupid. It always has been run like a business and always has to be. The only question is what kind of business. A Warren Buffet business or a Mitt Romney / orange pustule business?

[Botany]

36. Trump's B.A. is from the University of Penn* of which Wharton is part of but he did not get an MBA from

Wharton. Even if he got into Wharton’s MBA program he would have been over his head and
washed out PDQ.

* BTW Trump’s educational history includes:

Going to military school for high school to stay out of the criminal system. He beat up a
smaller student, tried to throw a teacher out a window, and he scared his mother to death.

Flunking out of Fordham

Daddy paying him for a back door admission to Penn where others did the work and took
the tests for him.

Stories of him being barely literate are “out there.”

In his first term he talked about Button and Nipple in place of Bhutan and Nepal.

Those Trump facts are on the internet so they have to be true.

[Grins]

47. George W. Bush was our "first MBA president"

From Harvard, ironically.

And Republicans were so proud that they went out of their way to push that on the voting public. His business failures? Ummmm - not so much.

Like Trump, W’s dad and pals bailed him out.

[Jacson6]

29. The problem with that is some entity has to be willing to buy or trade for the US bonds.

With Trump's arson fire of the US economy who would be willing to take such a chance?

[Kid Berwyn]

37. Thanks, Putin!

[D_Master81]

40. This is why Trump will fold

As Trump likes to say “you don’t hold the cards”. In these trade talks you’re slapping tariffs on countries that hold a large amount of our debt. If they get together and dump our bonds the US is screwed more than most know. Bond interest rates will skyrocket and we’ll have to pay back more in interest along with being a riskier investment in a once stable, safe haven.

[nitpicked]

41. Link to AP

https://apnews.com/article/japan-treasurys-trump-tariffs-44b9b37bf7a290701201322f69bade2e