Which Countries Hold the Most US Debt? Obligation Ranked 2025

As of December 2024, foreign investors held $8.5 trillion of U.S. national debt, equal to almost one-quarter of the country’s $36.2 trillion total debt. The largest single foreign creditor is Japan with $1 trillion, followed by China with $759 billion and the United Kingdom with $723 billion, according to the Pew Research Center.

Together, these top three account for nearly 30% of all foreign-held U.S. debt. While this number may seem alarming, the United States does not need to fully pay off its debt; instead, it must service interest payments and roll over maturing bonds.

What matters more is the debt-to-GDP ratio, which stood at 98% at the end of FY 2024, hovering near the warning line of 100%.

At its core, U.S. national debt is the sum of all money the federal government owes to its creditors. As of May 2025, that figure has risen to $36.2 trillion, making it the highest debt burden of any country in the world. What makes this number more alarming is its relationship to the economy. U.S. debt now equals 122% of annual GDP, meaning the government owes more than the entire yearly output of the country’s goods and services.

Top 20 Foreign Holders of U.S. Debt (December 2024)

Rank	Country / Region	Holdings (USD)	Share of Foreign Debt
1	Japan	$1.0T	11.8%
2	China	$759B	8.9%
3	United Kingdom	$723B	8.5%
4	Luxembourg	$424B	5.0%
5	Cayman Islands	$419B	4.9%
6	Canada	$379B	4.5%
7	Belgium	$375B	4.4%
8	Ireland	$336B	4.0%
9	France	$332B	3.9%
10	Switzerland	$289B	3.4%
11	Taiwan	$282B	3.3%
12	Hong Kong	$255B	3.0%
13	Singapore	$249B	2.9%
14	India	$219B	2.6%
15	Brazil	$202B	2.4%
16	Norway	$158B	1.9%
17	Saudi Arabia	$138B	1.6%
18	South Korea	$125B	1.5%
19	Mexico	$103B	1.2%
20	Germany	$97B	1.1%
—	Rest of World	$1.6T	18.8%
—	Total – Foreign Holdings	$8.5T	100%

Why Countries Buy U.S. Debt

Foreign countries purchase U.S. Treasury securities because they are considered among the safest and most liquid financial instruments in the world. U.S. Treasuries act as the global benchmark for risk-free assets, trusted even during times of financial crisis. Central banks in particular rely on them as part of their foreign exchange reserves. By holding Treasuries, they gain both a secure store of value and a tool to stabilize their currencies in times of volatility.

For export-driven economies such as Japan and China, the motivation goes even deeper. These countries often run significant trade surpluses with the United States, earning large amounts of U.S. dollars. Instead of letting that cash sit idle, they recycle it into Treasury bonds, which allows them to earn interest while also keeping their own currencies from appreciating too quickly against the dollar. This practice helps maintain their export competitiveness.

Instead, they serve as investment conduits. Global banks, hedge funds, and multinational corporations use these jurisdictions as financial intermediaries, routing capital through them for tax, regulatory, or efficiency reasons. In reality, the ultimate buyers may be spread across multiple countries, even if the holdings are recorded in these smaller states.

In short, countries buy U.S. debt for a mix of security, practical finance management, and strategic economic policy. America’s ability to borrow at such large scales is possible because the world continues to see its bonds as the ultimate haven.

The Growing U.S. National Debt

The U.S. national debt reached $36.2 trillion in May 2025, marking an unprecedented milestone in American financial history. The Congressional Budget Office (CBO) projects that, without major policy changes, this figure could swell to $50 trillion by 2035. This growth is the result of a long-standing imbalance: the federal government consistently spends more than it collects in taxes and other revenue, forcing the Treasury to issue additional bonds to cover the gap.

Key drivers of this rising debt include entitlement programs such as Social Security and Medicare, which are expanding rapidly as the U.S. population ages. At the same time, defense spending remains one of the largest budget categories, while interest on the existing debt itself has become a runaway expense.

In fact, with interest rates climbing in recent years, the U.S. government spent over $1 trillion in 2024 just on debt servicing, a sum that exceeded total defense spending for the first time, according to CBS.

The size and pace of this debt growth matter for long-term sustainability. While the U.S. enjoys unique advantages, such as issuing the world’s reserve currency, an unchecked debt trajectory could eventually test investor confidence. If buyers ever demand higher yields to hold Treasuries, the cost of financing could accelerate even faster, putting more pressure on future budgets.

Debt-to-GDP Ratio: The Real Metric to Watch

@davejorgenson

The U.S. debt is looking a lot like WWII, with the debt-to-GDP ratio projected to get even higher. It will continue to swell over the next decade, according to an economic outlook published by the Congressional Budget Office. It’s expected to be at 118% by 2035, surpassing the current record during World War II, when it hit 106% This video was made as part of my partnership with @Free the Facts, a nonpartisan, non-profit organization that empowers young Americans to learn and lead. New episodes every Tuesday!

♬ original sound – Dave Jorgenson 🕺

A country’s absolute debt is less important than its debt-to-GDP ratio. At 98% of GDP, America’s debt level is approaching the size of its economy. Economists often cite 100% as a red line, after which debt can weigh on growth. For context:

Japan shows that high debt can be sustained if most of it is domestically owned, but the U.S. relies on both domestic and foreign buyers. This makes maintaining investor confidence essential.

Does the U.S. Need to Pay Off Its Debt?

The short answer: No, not fully. Countries rarely eliminate debt. The U.S. only needs to service interest and refinance maturing bonds.

Britain, for example, still carries debt from the Napoleonic Wars over 200 years ago.

What matters is whether America can meet its obligations without default and whether investors retain confidence in Treasuries as the world’s safest asset.

Domestic vs. Foreign Holders of U.S. Debt

 

View this post on Instagram

 

A post shared by Visual Capitalist (@visualcap)

One often overlooked fact is that three-quarters of U.S. debt is held domestically. Of the $36.2 trillion total:

• $15.16 trillion (42%) is owned by private U.S. investors, often through pension funds, mutual funds, or savings bonds.
• $7.36 trillion (20%) is held by intra-governmental accounts such as the Social Security and Medicare trust funds.
• $4.63 trillion (13%) is owned by the Federal Reserve, which buys Treasuries to stabilize financial markets and guide interest rates.

Among private investors, Warren Buffett’s Berkshire Hathaway stands out as the single largest non-government holder, with Treasuries valued at $314 billion.

The remaining 25% (about $9.05 trillion) is held abroad. This share has changed drastically over time: in 1970, only about 5% of U.S. debt was foreign-owned, but globalization and America’s role as the world’s reserve currency have since expanded that figure fivefold.

Conclusion

The fact that foreign investors hold $8.5 trillion of America’s debt underscores the deep financial interconnection between the U.S. and the global economy. Japan and China, despite geopolitical rivalry, remain America’s top lenders. With the debt projected to soar toward $50 trillion, the critical question is not whether the U.S. can pay everything back; it is whether its economy will remain strong enough to service the obligations and keep the world’s trust.