Several countries, led by China, Brazil, and India, have reduced their holdings of U.S. Treasury securities, often driven by efforts to diversify reserves, stabilize their own currencies, or respond to geopolitical risks. Despite these reductions, overall foreign demand remains high, with Japan remaining the largest foreign holder at over $1 trillion.
Morningstar

Key Countries Reducing U.S. Treasury Holdings (2025–2026 Trends):

China: Has been a consistent, long-term seller, reducing its holdings by over $250 billion over the past decade and reducing its stake by roughly $85.9 billion in the year ending Nov 2025.

Brazil: Reduced its holdings by approximately $60.8 billion between Nov 2024 and Nov 2025, according to Visual Capitalist.
India: Reduced its holdings by over $47 billion during the same period.

British Virgin Islands: Actively reduced holdings by $38.9 billion.
Fortune

Key Reasons for Selling:
Diversification & Exchange Rate Management: Countries like China sell Treasury bonds to purchase their own currency, thus increasing its value and reducing reliance on the US dollar.

Geopolitical Concerns: Sanctions, such as those imposed on Russia, have prompted some nations to reassess their dependency on U.S. dollar assets.

Market Trends: Concerns over rising U.S. debt levels, along with trade policy shifts (e.g., tariffs), have prompted some nations to reconsider their investment in U.S. Treasury bonds, which are generally deemed safe, according to this YouTube video and a China Daily article.
Atlantic Council

Contextual Factors:
Record Holdings: Despite selling by some nations, total foreign holdings of U.S. Treasuries actually hit a record $9.4 trillion in November 2025, notes Bloomberg.

Largest Holders: As of late 2025/early 2026, Japan is the top holder ($1.1T+), followed by the UK and China, based on data from the U.S. Department of the Treasury.
Morningstar