The U.S. government issues Treasury securities to fund the deficit between the amount of money that it takes in through taxes and other sources, and the amount of money that it spends on defense, welfare programs, and the interest it pays on its current debt. According to our research, as of the end of fiscal year 2019, the government's total debt is just over $22 trillion.

Key Takeaways

  • Roughly three-quarters of the government's debt is public debt, which includes Treasury securities.
  • Japan is the largest foreign holder of public U.S. government debt, owning $1.266 trillion in debt as of April 2020.
  • China ranks second in total U.S. debt owned by foreign countries, with the U.K., Ireland, and Luxembourg rounding out the top five.

The debt is held in two categories: intragovernmental debt and public debt. Intragovernmental debt is debt owed to other federal agencies and makes up roughly a quarter of outstanding debt. This includes Social Security, military retirement funds, Medicare, and other retirement funds. The remainder is public debt, with foreign governments and investors holding approximately 30%. So which countries hold the most?


Japan is the largest holder of U.S. debt, with $1.266 trillion in Treasury holdings as of April 2020. This is the highest level of debt owned by Japan in several years, beating out China as the largest holder of U.S. debt.

The increase in Japan's holdings is its largest since 2013. The low and negative yield market in Japan makes holding U.S. debt more attractive. Japan now makes 18% of foreign-owned U.S. debt.


China gets a lot of attention for holding a big chunk of the U.S. government's debt and for good reason, given its rapidly expanding economy. China takes the second spot among foreign holders of U.S. debt with $1.07 trillion in Treasury holdings in April 2020, just behind Japan. China has trimmed its holdings and this is the lowest amount held in the last two years. It currently holds 15.5% of the foreign debt.

United Kingdom

The United Kingdom has increased its holdings in U.S. debt to an eight-year high in April 2020 to $368 billion. It has increased in rank as Brexit continues to weaken its economy. This is 6% of the total foreign debt.


It would appear odd that Ireland is the fourth-largest holder of U.S. debt, particularly when comparing its economy to other European nations, such as Germany. However, a big factor in Ireland's place is the fact that many U.S. multinational companies, such as Alphabet/Google, set up shop there for more favorable taxes on foreign returns.

Dublin is a focal point for international fund management but also represents the European branches of U.S. technology and pharmaceutical companies. However, there has been a drop in Ireland's U.S. debt holdings, signaling a possible change in multinational attitudes as they move money back to the U.S. as rules on how foreign earnings are taxed change. Ireland holds $300 billion in U.S. debt, which is 4% of foreign debt.


Luxembourg is the fifth-largest holder of U.S. debt among foreign countries while having the 72nd smallest economy by GDP. Luxembourg holds $267.8 billion in U.S. Treasuries, equal to about 3.8% of total foreign holdings.