China’s holdings of U.S. Treasuries fell to a six-month low in July, just as a trade war between the world’s two largest economies began heating up. China’s ownership of U.S. bonds, bills and notes slipped to $1.17 trillion, the lowest level since January and down from $1.18 trillion in June, according to data released by the Treasury Department on Tuesday. Japan, the largest foreign investor in Treasuries after

China, increased its holdings, as did Saudi Arabia, Taiwan, Singapore and France. The first salvos in the U.S.-China trade conflict were fired on July 6, when the Trump administration activated tariffs on $34 billion of Chinese goods, which sparked immediate in-kind retaliation from Beijing. The escalation caused the yuan to drop roughly 2 percent in July, suggesting that the Asian nation shed U.S. bonds as a way to sell dollars and support its currency, according to NatWest Markets. READ MORE