Foreigners hold a record $9.4 trillion of US debt, and a shrinking share of it

Foreign investors held $9.37tn of US Treasury securities at the end of May, according to the Treasury's Major Foreign Holders table, released on July 14. That is the largest dollar figure on record.

It is also a smaller slice of the debt than it used to be. At the end of 2019 foreigners held just under 40 percent of the debt the public owns. In May they held 29.7 percent of it. The pile got bigger and the foreign share of it got smaller, at the same time, and both facts come from the same government ledger.

That is the whole story in two sentences, and almost every version you have read gets one half of it and drops the other. Here is each piece, tied to the document it comes from.

How much US federal debt is held abroad?

Foreign holders owned $9.37tn of US Treasury securities in May 2026, the latest month reported. That was 23.9 percent of the $39.21tn total public debt, and 29.7 percent of the $31.52tn the government owes to the public rather than to itself. Roughly one Treasury dollar in four is held abroad.

The two denominators matter, and confusing them is the most common error in this subject. The total public debt of $39.21tn includes $7.69tn the government effectively owes itself, held in the Social Security, Medicare and federal retirement trust funds. Nobody abroad can buy or sell those. So the honest measure of foreign reach is the share of the debt held by the public, and that figure is 29.7 percent.

Keep the number. Just under 30 cents of every dollar the government has borrowed from real lenders is owed to a foreign holder. It is a large share. It is not a majority, it has never been a majority, and it is lower now than it was before the pandemic.

Which countries hold the most US debt?

Japan is the largest foreign holder, at $1.14tn. The United Kingdom is second at $949bn, and mainland China is third at $659bn. Belgium, the Cayman Islands, Luxembourg and Canada each hold between $436bn and $472bn. The top three alone account for $2.75tn, a little under a third of all foreign holdings.

Here is the top of the table, from the May release, with the figure a year earlier alongside it. Every number is Treasury's, in billions of dollars.

Two of those lines have quietly changed the order of the whole list. The United Kingdom passed China for second place in March 2025, and Japan passed China for first place back in June 2019. China led this table for most of the years after the financial crisis. It now sits third and falling.

Why are Belgium, the Cayman Islands and Luxembourg on the list?

Because the table records where a security is held in custody, not who owns it. A Chinese or Saudi or Norwegian investor who buys Treasuries through a custodian in Brussels, George Town or Luxembourg shows up as Belgian, Caymanian or Luxembourgish. The named country is the address of the vault, not the nationality of the money inside it.

Treasury says so itself, in the note printed under every release. The data are collected from US custodians and broker-dealers, and, in the department's own words, "if a U.S. Treasury security purchased by a foreign resident is held in a custodial account in a third country, the true ownership of the security will not be reflected in the data." It adds that the figures cannot properly attribute holdings managed by foreign portfolio managers on behalf of residents of other countries. The department's flat conclusion is that it is difficult to draw precise conclusions about individual countries from this table at all.

Belgium is the clearest case. Its $472bn is wildly out of proportion to the size of its economy, and the reason is that Euroclear, one of the two big international securities depositories that settle bond trades for the whole world, is headquartered in Brussels. The Cayman Islands number is hedge funds. Luxembourg and Ireland are investment funds. London is asset managers running money for clients who live somewhere else.

Add up the lines that are mostly financial plumbing, the United Kingdom, Belgium, the Cayman Islands, Luxembourg, Ireland, Switzerland, Hong Kong and Singapore, and you get about $3.5tn. More than a third of all foreign holdings sit in jurisdictions where the custodial figure and the ownership figure are not the same thing. Once a year the Treasury runs a full survey that reassigns holdings to the country of the actual owner, and it reliably shrinks the financial-centre lines and enlarges the holdings attributed to the Gulf, to China and to others who prefer to hold through intermediaries. The monthly table is a fast estimate. The survey is the correction.

This is the single most important thing to know before reading any chart of foreign holders, and it is the thing those charts almost never say.

Is China dumping US debt?

China's holdings have fallen for years, from more than $1.2tn in 2017 to $659bn in May, and the decline is real. But dumping overstates it. Some of the drop is China selling, some is Treasuries losing market value as yields rose, and some is Beijing moving holdings into custodians elsewhere, where they leave the Chinese line and join a financial-centre line instead.

The direction is not in doubt. China held over a trillion dollars of Treasuries as recently as 2020 and holds about two-thirds of that now. It has gone from first on this list to third. The question is what the fall means, and the honest answer is less dramatic than the headline.

A country that wanted to punish the United States by selling its Treasuries would be selling into a market where the United States is by far the largest participant, and would drive down the value of the reserves it had not yet sold. It would also need somewhere to put the proceeds, and there is no market as large or as liquid to put them in. China has been trimming for a decade, steadily and without incident, mostly by letting bonds mature rather than by selling. The word for that is diversification, and it is what a large reserve manager does. It is not a threat that has been triggered. The valuation effect deserves weight here too, because a portion of every large holder's decline in a rising-yield period is price rather than sales, and the monthly table does not separate the two.

Are foreign governments still the main buyers?

No. Foreign official institutions, meaning central banks and finance ministries, held $3.85tn in May, which is 41 percent of all foreign holdings. The rest, $5.52tn, belongs to private foreign investors: funds, banks, pension plans and insurers. A decade ago the official sector was the larger share. Private money is now the majority, and it is doing the buying.

The year just past shows this cleanly. Total foreign holdings rose $349bn between May 2025 and May 2026. Over the same twelve months, the official sector's holdings actually fell, by $29bn. Every dollar of net foreign buying, and then some, came from private hands.

That shift changes what the number means. When central banks were the marginal buyer, foreign demand for Treasuries was a policy decision, tied to exchange-rate management and reserve accumulation in Asia and the Gulf. When private funds are the marginal buyer, foreign demand is a market decision, tied to yield, to the dollar, and to whether a Treasury still looks like the safest large asset available. The first kind of demand is sticky and political. The second is priced daily and can move faster. The United States has swapped a patient creditor for a more attentive one.

Is the foreign share of the debt growing?

No, it is falling. Foreign holdings rose from $6.84tn at the end of 2019 to $9.37tn in May, an increase of 37 percent. Over the same period the total public debt rose 69 percent, from $23.2tn to $39.21tn. The debt grew nearly twice as fast as foreign appetite for it, so the foreign share fell even as the dollar amount climbed to a record.

This is the fact that the alarming version of the story leaves out. The foreign share of the debt held by the public has drifted down from just under 40 percent at the end of 2019 to under 30 percent now. The buyers filling the gap are domestic. American banks, funds, pensions, insurers and households have absorbed the flood of new issuance since 2020, and for part of that period so did the Federal Reserve.

The implication runs against intuition. A country that has become more indebted has at the same time become less dependent on foreign lenders, not more. The vulnerability people worry about, that foreigners could stop funding the United States, has been shrinking as a share of the whole even while the headline debt number has been climbing.

Who holds the rest of the debt?

Almost everyone is domestic. Of the $39.21tn total, $7.69tn is held inside the government in trust funds, and of the $31.52tn owed to the public, more than 70 percent is held by Americans. The Federal Reserve alone held about $4.46tn of Treasuries in May, more than every foreign government and central bank combined.

That last comparison is worth sitting with. The Fed is a bigger holder of US government debt than Japan, the United Kingdom and China put together. Its holdings ($4.46tn in late May, per the Federal Reserve's balance sheet) exceed the entire foreign official sector of $3.85tn. When the central bank bought Treasuries at scale in 2020 and 2021 and then let the balance sheet run down, it moved the ownership of the debt around far more than any foreign government did.

The rest of the domestically held debt sits with US mutual funds and money-market funds, banks, state and local governments, pension funds, insurance companies and individual households buying bills and notes directly or through funds. None of it is foreign, none of it is subject to a foreign government's decision, and together it is the majority of the debt the public holds.

What this changes

For your own finances, nothing directly. You do not owe this and you cannot buy or sell it. What it changes is how to read the next headline that says a foreign country is about to stop funding America.

Three things are true at once, and any honest account holds all three. Foreign investors hold a record amount of US debt in dollars. They hold a falling share of it, because the debt has grown faster than they have bought. And a large part of what the monthly table calls foreign is money passing through a financial centre on its way to and from owners the table cannot see.

The real risk in the debt is not who holds it. It is the cost of it. Net interest passed $970bn in fiscal 2025 and now rivals the defence budget, a figure driven by the size of the debt and the level of rates, not by the nationality of the lender. Foreign holders are a symptom worth tracking. They are not the disease, and on the numbers they are a smaller part of the picture than they were before the pandemic.

FAQ

How much US debt does China own? China held $659bn of US Treasury securities in May 2026, third behind Japan and the United Kingdom. That is down from $733bn a year earlier and from more than $1.2tn in 2017. The true figure is probably somewhat higher, because some Chinese holdings are managed through custodians in other countries and are recorded there.

What share of US debt is foreign-owned? Foreign holders owned 23.9 percent of the total public debt in May 2026, and 29.7 percent of the debt held by the public. Both shares are lower than before the pandemic, when the foreign share of publicly held debt was close to 40 percent.

Which country holds the most US debt? Japan, at $1.14tn as of May 2026. Japan overtook China for the top spot in June 2019 and has held it since. The United Kingdom is second and China third.

Could a foreign country crash the US by selling its Treasuries? It could sell, but it would sell into a market the United States dominates, would lower the value of the reserves it still held, and would have nowhere comparable to move the proceeds. China has reduced its holdings steadily for a decade without market disruption, mostly by letting bonds mature. The larger buyers of new US debt are now domestic, including the Federal Reserve, which holds more Treasuries than all foreign governments combined.

Why is Belgium such a large holder? Because Euroclear, one of the world's main international bond-settlement systems, is based in Brussels, so securities owned by investors elsewhere are held in custody there and recorded as Belgian. Its holdings reflect the address of the custodian, not the nationality of the owner.