Foreign Treasury Selloff Accelerates as Trade Tensions Rise, Threatening U.S. Borrowing Costs

Published: 23-04-2025, 11:15 am | Updated: 23-04-2025, 10:06 am

BNY data shows foreign investors are rapidly selling U.S. Treasury bonds in April 2025 amid President Trump’s escalating tariff disputes. John Velis, BNY’s Americas macro strategist, warns that Treasurys’ “haven status is increasingly in question,” with the week ending April 11 experiencing one of the largest selloffs in years.

While the White House defends tariffs as tools to combat fentanyl trafficking, control immigration, and boost domestic manufacturing, the U.S. relies heavily on foreign buyers to finance its deficit. Foreign ownership of Treasury debt has fallen from 50% in 2008 to around 30% today. The selloff accelerated after Trump’s April 2 announcement of major “reciprocal” tariffs, though he later paused some for 90 days. Continued foreign selling threatens to increase borrowing costs for both the federal government and American consumers.