US debt surge leaves China, Japan holding the bag in 2026

By William Pesek – Asia Times

This year will see the globe’s biggest economy reach a dubious milestone: trillion-dollar interest payments on runaway US government debt.

As Donald Trump’s White House increases debt issuance to pay for this increasing shortfall, it will be looking Asia’s way. This region is home to many of Washington’s biggest holders of US Treasuries. The top two are Japan (nearly $1.2 trillion) and China ($689 billion).

The question, though, is why would officials in Tokyo and Beijing, in their right minds, increase their exposure to the US economy at such a precarious moment?