China’s holdings of U.S. Treasuries continued to grow in March to a five-month high, official figures revealed on Tuesday, with speculation that stockpiles of debt could be a bargaining chip for future trade tensions between the two countries.
Reserves grew by $11 billion in March to $1.19 trillion, keeping China as the U.S’s largest creditor. In second place was Japan, whose holdings dropped $16 billion to $1.04 trillion during the month, according to Bloomberg.
March’s increase coincided with a steep intensification of trade threats between Washington and Beijing, with the White House signing in $50 billion of tariffs on Chinese manufacturing imports and promising $100 billion more. Beijing then retaliated in-kind with equal duties on a list of U.S. consumer goods.