The history knows that China and Japan have been the largest holder of US Treasury papers but the rules and risk of games have changed the holding patterns. The key thing to be noticed is who new buyers are and what the global community thinks going ahead in the long term about the US treasuries. Many times small sparks show the ugly part of the larger fire behaving like carnivorous, waiting to swallow an economy. The current scenario of the US economy and the long-term outlook seems to be a threat provides the way things are going on. Trade war, drop in govt. corporate tax revenue and rising deficit create an immense problem for the US economy. If by reducing taxes and creating trade barriers  American Job creation should have been increased then every economy should have done the same. Tax cuts do not spook investments but only shareholders wealth.

Japan has been consistently reducing its holding whereas China had some upward hunger for the same and later on came down too. The 3rd position of US treasury holding is being held by those countries where Corporate America prefers to register its overseas cash holding. Ireland. Yes, you are correct to hear. The below list names the countries other than China and Japan who are holding the US treasury.
 Ireland, in the third position behind China and Japan. It’s where Corporate American likes to register its “overseas cash.” It held $300 billion of Treasuries in April, about the size of its GDP.

The largest holders of US Treasuries, after China and Japan:
·         Ireland: $300 billion
·         Brazil: $294 billion
·         UK (“City of London!”): $263 billion
·         Switzerland: $242 billion
·         Luxembourg: $214 billion
·         Hong Kong: $194 billion
·         Cayman Islands: $181 billion… down from $250 billion a year ago!
·         Taiwan: $168 billion
·         Saudi Arabia: $160 billion
·         India: $152 billion
·         Belgium: $137 billion
·         Singapore $118 billion

If we look at the numbers for the US Total Debt splitting in two parts we find that
·         Debt held “internally” by US government entities rose by $181 billion to $5.73 trillion.
·         Debt that is publicly traded soared by $1.05 trillion to $15.34 trillion.

Americans themselves are buying the US Treasury through institutional and individual investors, directly and indirectly, through bond funds, pension funds, and other ways. Coming up with the volume of purchase in monetary terms it stands to around $1.01 trillion. That’s quite a big chunk as interest rates start climbing. I told long back in one of my articles that US itself is freeing up its Dollar from the clutches and also risking risk and reward ratio leads to more higher interest rates demand from countries like China.  Hence the best way to free up the treasury and make it’s a healthy product for investments is its own people shifting the assets from equity to debt.

 We should not forget that the yield from the current Treasury Yields from US now competitive enough with the average S&P 500 dividend yield. Low risk and better returns are the best part. The ongoing trade war and investment restriction and other aspects give an immense indication that economic will face jitters and so the corporate earnings and hence gains will not be similar to what S&P 500 provided in the last couple of years.

Further, the way the fiscal deficit is climbing up it's being found that total federal budget deficit surged to $530 billion in the first eight months of fiscal 2018, which began in October, surpassing last year's deficit over the same period by $97 billion. Now due to tax cut down corporate tax revenues, for example, were down $42 billion, about 25 percent till now. This number will amplify too few more percentage jumps. The story is yet to complete. Due to interest rate hike, the government spent a whopping $239 billion on interest payments alone, up 15 percent from the same period last year. This number will also increase in the coming days.

According to CBO it has been predicted that federal deficits will top $1 trillion in 2020. The CBO projects the Republican tax law passed last fall will add $1.84 trillion to the federal deficit over the next 10 years. Congressional Budget Office projects that the federal debt will continue to grow and that the debt-to-GDP ratio will be 94.5 percent in 2027. Interest payments on that debt will also continue to grow, nearly doubling from 1.6 percent of GDP in 2018 to 3.1 percent in 2028. In dollars, that means net interest payments will increase from $316 billion in 2018 to $915 billion in 2028.

Rising debt would spook problems on the Treasury segment where higher interest rates and risk to investments will be significant.   Is that reason why China and Japan are dumping and they are getting out of this holding? Dollar and Yen war is already in place but the rising debt is a threat for the US government in parallel to falling in income from corporate tax revenue. According to the certain projections, United States' gross domestic product will reach 78 percent, according to the CBO, the highest ratio since 1950. The debt is projected to grow to 96 percent of GDP by 2028 before eventually surpassing the historical high of 106 percent it reached in 1946. This is a very big impact on the economy in the long term. Tax cut down may not be able to pass on real benefit to the economy unless the door related trade is kept open.