In this piece, we will take a look at the 5 countries that own the most U.S. debt. For more countries, head on over to the 15 countries that own the most U.S. debt.
5. Luxembourg
Total holdings of U.S. treasury securities (in billions): $318.2
Similar to Belgium, the reason that Luxembourg is considered among the countries that own the most U.S. debt is because Luxembourg has a strong financial core and international deposits held by finance companies in the country count towards Luxembourg’s ownership of U.S. debt.
4. Belgium
Total holdings of U.S. treasury securities (in billions): $331.1
Due to U.S. securities being considered among the safest investments in the world, Belgium has made significant investment in U.S. debt. Another reason why Belgium is in this list is because of the fact that major depository institutions such as Euroclear and State Street Corporation (NYSE:STT) have a strong presence in Belgium, and investment in U.S. Treasury securities by these institutions is also reflected in Belgium’s U.S. debt ownership.
3. United Kingdom
Total holdings of U.S. treasury securities (in billions): $668.3
UK’s finance minister stated earlier this year that it would be ” absolutely devastating” if the U.S. was unable to raise the debt ceiling, which was ultimately resolved. The UK is itself under pressure because of its rising debt, with its external debt crossing $3 trillion, and is one of three countries that own the most U.S. debt with said ownership greater than $500 billion.
2. China
Total holdings of U.S. treasury securities (in billions): $859.4
Despite political tensions between China and the U.S., China is still a major holder of U.S. debt, even though it has declined from an all-time high of $1.3 trillion in 2013. China started purchasing U.S. debt back in 2000 after the latter endorsed the former’s entry into the World Trade Organization, leading to a trade boom. If a U.S. debt default happens, China’s already struggling economy post Covid-19 might be in major trouble.
1. Japan
Total holdings of U.S. treasury securities (in billions): $1,104.4
Topping the list of the 15 countries that own the most U.S. debt is Japan, which is also the only nation in the world to hold over $1 trillion of U.S. government securities. While the number has declined by $200 billion in the past one year, Japan would’ve had the most to lose if an unprecedented U.S. debt default happened, considering the debt ceiling impasse that took place but was resolved at the last moment in May 2023. If the default had occurred, then the fall in value of U.S. Treasuries would’ve lead to a decline in Japan’s foreign reserves.
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