A country's gross external debt is the liabilities that are owed to nonresidents by residents. The debtors can be governments, corporations or citizens. External debt may be denominated in domestic or foreign currency. It includes amounts owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and the World Bank.
The current
U.S. debt is approximately $36.2 trillion, according to the U.S. Treasury. For
the average American, that number is so large it’s hard to even comprehend. But
that’s not the only perspective worth noting. When compared with the total net
worth held by the American public, the debt becomes much more rational. Total
U.S. household net worth is currently over $160 trillion.
Per the U.S.
Treasury, here are the top 10 countries holding U.S. debt in 2025.
Japan $1.13
trillion
United
Kingdom $807.7 billion
China $757.2
billion
Cayman
Islands $448.3 billion
Belgium $411.0
billion
Luxembourg $410.9
billion
Canada $368.4 billion
France $360.6
billion
Ireland $339.9
billion
Switzerland $310.9
billion
Read more: Trump's net wealth and his properties in May 2025 with pics
Broadly, US
government debt increases as a result of government spending and decreases from
tax or other funding receipts, both of which fluctuate during a fiscal year.
The aggregate, gross amount that Treasury can borrow is limited by the United
States debt ceiling.
In spite of
the fear of foreign ownership of U.S. debt, it’s not accurate to portray the
market as being held captive by foreign players. The aggregate ownership, at
just 24% of outstanding debt, is spread out over a number of different
countries, leaving no single country with too much leverage. China, for
example, has been slowly liquidating U.S. debt for years without any undue
influence on the market as a whole.
At last, the U.S. remains among the safest and most liquid government securities markets in the world. It’s certainly true that from time to time foreign ownership of debt may decrease. This reduction in demand can push interest rates higher in the United States. Conversely, during periods of increased demand, buying pressure can push bond prices higher and yields lower.