Foreign governments and central banks are slowly selling US Treasuries, and Washington is responding with a two-track plan that could help keep borrowing costs down but risks a trade war.

• The US wants to make it worth staying in Treasuries and painful to leave them.
• The plan starts with oil: cheaper oil means lower inflation, which pulls bond yields down.
• That is why the government kept selling from the Strategic Petroleum Reserve every time oil prices rose this year.
• Trump's tariff threats are part of the same pressure campaign, aimed at pushing interest rates lower and discouraging lenders from dumping US debt.

Outlook: Expect more oil releases and tariff threats as long as foreign buyers keep pulling back from US bonds and rates stay high.