Taiwan Central Bank says that US debts too fast could affect the Treasury’s trust

TAIPEI (Reuters) – The Thaiwan central bank governor warned on Saturday that a rapid rise in U.S. debt could be “favourable” against the outlook for the US Treasury, and that US President Donald Trump’s trade policy has put investors in caution.

Taiwan’s $593 billion foreign exchange reserve is more than 80%, made up of US Treasury bonds, and earlier this month the Treasury Department said it was “sound” and still favored by investors, according to the central bank. It added that there was no concern about the dollar’s position as a major international reserve currency.

In a speech posted on the central bank’s website, Gov. Yang Chin Long said that Trump’s repeated criticism of the US Federal Reserve’s monetary policy has sparked concerns about independence.

“In addition, Trump 2.0’s trade policy has made investors hesitate to hold US Treasury bonds. Trump’s budget, “One Big Beautiful Bill Act,” could make US debts too fast.

“All of these have had a major impact on the international currency system, centered around the US dollar, and are based on the creditworthiness of the US.”

Trump’s sweeping tax cuts and spending bills are at the heart of his domestic agenda.

The bill will lead to an increase in the federal deficit of $2.8 trillion more than expected over the decade, despite boosting US economic outcomes.

In his first weeks of office, Trump announced swept tariffs for a wide range of countries and trading partners, including Taiwan.

Yang said Trump wanted tariffs to resolve the US trade deficit.

“However, tariff policy not only can’t solve structural problems, it could also affect the US economy, which could further impact the global trade and economic outlook.”

(Reporting by Liang-Sa Loh and Ben Blanchard, edited by Jacqueline Wong)