5 Foreign Countries That Own the Most U.S. Debt (2024)

The U.S. government incurs debt when it issues Treasury securities to fund the deficit between the amount of money that it receives in taxes and other revenues versus the amount of money that it spends on defense, welfare programs, the interest it pays on its current debt, and more.

As of April 1, 2024, the government's total debt is $34.63 trillion. The largest foreign countries that hold U.S. debt are Japan, China, the U.K., Luxembourg, and Canada.

Key Takeaways

  • The Bureau of the Fiscal Service classifies national debt as intragovernmental debt and debt held by the public.
  • Over three-quarters of the total national debt is public debt, which includes Treasury holdings by foreign countries.
  • Japan is the largest foreign holder of public U.S. government debt, owning $1.15 trillion in debt as of January 2024.
  • China ranks second in total U.S. debt owned by foreign countries, with the U.K., Luxembourg, and Canada rounding out the top five.
  • The total national debt is $34.63 trillion as of April 1, 2024.

Types of Debt

U.S. national debt is categorized as intragovernmental debt and public debt. Intragovernmental debt is debt held within the U.S. by federal agencies and entities. It makes up about a fifth of the total outstanding U.S. debt. This debt includes money owed to Social Security, military retirement funds, Medicare, and other retirement funds.

The remainder is public debt. Foreign governments hold a large portion of the public debt, while the rest is owned by U.S. banks and individual investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and holders of savings bonds.

As of April 1, 2024, $27.60 trillion of the national debt is public debt.

Congress sets a ceiling on the debt that can be raised periodically. On Dec. 16, 2021, the debt ceiling was raised by $2.5 trillion to $31.4 trillion. This is the largest dollar amount increase in the national debt. In June 2023, the debt ceiling was suspended by Congress till 2025 as the national debt passed the $31.4 trillion mark.

1. Japan

Japan held $1.15 trillion in Treasury securities as of January 2024, beating out China as the largest foreign holder of U.S. debt. The low and negative yield market in Japan makes holding U.S. debt attractive. Japan holds about 14.4% of foreign-owned U.S. debt.

2. China

China gets a lot of attention for holding a big chunk of the U.S. government's debt. Given that its economy expanded rapidly in the last decades, perhaps this shouldn't come as a surprise. China takes the second spot behind Japan among foreign holders of U.S. debt with $797.7 billion in Treasury holdings as of January 2024.

While Chinese-owned debt is frequently drummed up as a political talking point, there's nothing particularly sinister about an export-oriented economy investing in Treasury securities. Treasuries are a logical investment for a country with high foreign currency reserves. China currently holds 10.2% of U.S. foreign debt.

3. The United Kingdom

British investors hold $753.5 billion of U.S. debt as of January 2024. The U.K.'s investment in U.S. debt may be linked to its difficult economic situation. The U.K. holds about 9.4% of U.S. foreign debt.

The largest owner of U.S. debt by far is actually the U.S. government, which holds Treasury securities in various government accounts and pension funds.

4. Luxembourg

Luxembourg is the fourth-largest holder of U.S. debt among foreign countries while having one of the highest GDP per capita—$125,006 as of 2022, the latest data available. This ranking may be due to Luxembourg's status as a tax haven, where wealthy investors park their funds in local holding companies. Much of this wealth is then invested in various securities, including Treasuries.

As of January 2024, Luxembourg held $376.5 billion in U.S. Treasuries, equal to 4.69% of total foreign holdings.

5. Canada

The U.S.'s neighbor to the north, Canada, rounds out the list of the top five holders of U.S. debt. As of January 2024, the Great White North holds $339.8 billion of U.S. debt, making up 4.23% of the total.

Who Owns U.S. Debt Besides Foreign Governments?

Other holders of U.S. national debt include U.S. banks and investors, state and local governments, mutual funds, pension funds, insurance companies, and investors in savings bonds. Various agencies and entities within the U.S. government also own debt, which is known as intragovernmental debt.

What Is the Current National Debt?

As of April 1, 2024, the total U.S. national debt is $34.63 trillion, after crossing the $30 trillion mark for the first time in January 2022. At the end of 2019, before the COVID-19 pandemic, the national debt was $23 trillion. One year later, it had risen to $27.7 trillion. Since then, it has steadily increased.

Why Is the National Debt So High?

It's high because the U.S. continues to spend more than it receives in revenue. Therefore, it must issue more debt to cover the difference. The national debt is an accumulation of federal budget deficits. Every spending program and tax cut adds to the debt unless paid for by new appropriations.

Why Is the U.S. in Debt to China?

The U.S. doesn't restrict who may buy its securities. China invests in U.S. debt because of the positive effect these low-risk, stable investments can have on its economy. By investing in dollar-denominated securities, the value of the dollar increases relative to the value of China's currency, the yuan. This, in turn, makes Chinese goods cheaper and more attractive than U.S. goods to buyers. That increases sales and strengthens the economy.

The Bottom Line

U.S. Treasury securities are considered to be some of the most liquid and safest assets in the world. For this reason, and because a majority of global trade is conducted in U.S. dollars, many countries hold U.S. debt as an investment.

5 Foreign Countries That Own the Most U.S. Debt (2024)


5 Foreign Countries That Own the Most U.S. Debt? ›

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Which 5 countries own the most US debt? ›

Top Foreign Owners of US National Debt
  • Japan. $1,098.2. 14.52%
  • China. $769.6. 10.17%
  • United Kingdom. $693. 9.16%
  • Luxembourg. $345.4. 4.57%
  • Cayman Islands. $323.8. 4.28%

How much US debt is owned by foreign countries? ›

Foreign holders of United States treasury debt

According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of eight trillion U.S. dollars in U.S. treasury securities as of January 2024.

Who owns the US debt? ›

The major international owners of US debt include Japan ($1.1T), China, UK, Belgium, Switzerland, Cayman Islands and smaller amounts from the rest of the world. After the recent weak treasury auction, US government officials warned that they are seeing waning demand from international buyers.

Who owns most of US foreign debt? ›

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Who owns over 70% of the US debt? ›

Who owns the most U.S. debt? Around 70 percent of U.S. debt is held by domestic financial actors and institutions in the United States. U.S. Treasuries represent a convenient, liquid, low-risk store of value.

What happens if China dumps US bonds? ›

If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.

How much does China owe the United States? ›

The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.

Why is China selling US treasuries? ›

Selling Treasurys is a fast way to whip up U.S. dollars, and China will sometimes use extra dollars to go out on the global market and buy up their own currency. That artificially pumps up its value. It's like planting someone at an auction to drive up your prices. That's one idea.

What country owes the US the most money? ›

With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt. Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.

What country has no debt? ›

Singapore is one of Asia's major financial centers. It is also one of the most prosperous countries on the planet. And all this has been achieved without taking on any meaningful public debt. In fact, very much like Norway, Singapore has more assets than debt.

Does Britain still owe America money? ›

How much does the UK owe the US? Financially, nothing. All financial debts including interest from WW2 have been repaid. If it was not for Britain the USA would have found themselves at war with Europe, Japan, Italy, most Arab States and every powerful nation in the world.

Who does the US owe trillions to? ›

Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.

How can the US get out of debt? ›

Tax hikes alone are rarely enough to stimulate the economy and pay down debt. Governments often issue debt in the form of bonds to raise money. Spending cuts and tax hikes combined have helped lower the deficit. Bailouts and debt defaults have disadvantages but can help a government solve a debt problem.

Who has more debt than the US? ›

Debt-to-GDP Ratio for Advanced Economies in 2023
Economy by Gross Debt% of GDP (2023)
🇸🇬 Singapore168%
🇮🇹 Italy144%
🇺🇸 United States*123%
🇫🇷 France110%
17 more rows
Dec 11, 2023

Who is the biggest holder of US debt? ›

The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.

Is China in more debt than the US? ›

Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.

What countries own the most debt? ›

Profiles of Select Countries by National Debt
  • Japan. Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP. ...
  • United States. ...
  • China. ...
  • Russia.

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