Top 12 Countries the U.S. Owes Money To

Creditor name: Taiwan

Amount of U.S. debt owned: $255.6 billion

This small island nation makes nearly all of its money exporting goods to Europe, the U.S. and China. So when the world economy is good, the Taiwanese economy is very good [source: Shapiro]. But to hedge for the bad times, Taiwanese investors put their money in the safest securities in the world: U.S. debt.

Taiwan is a democracy with a constitution and a freely elected president. After World War II, the Communist party wrested control of the government from the Nationalist party and created the People's Republic of China (PRC). But many Nationalist leaders and sympathizers relocated to Taiwan, officially called the Republic of China [source: Bloomberg]. In essence, there were two Chinas. And the wild thing is, there still are.

Both mainland China and Taiwan considered themselves the "one China," and the U.S. often finds itself in awkward diplomatic territory. On the one hand, America recognized PRC as the "real" China and severed diplomatic relations with Taiwan in 1979 [source: Maizland]. But on the other hand, it sells Taiwan 100 percent of its arms, a $129 million transaction [source: Frohlich]. Money from Taiwanese investors also helped fuel the economic boom on the mainland [source: CIA World Fact Book].

Creditor name: Switzerland

Amount of U.S. debt owned: $256.6 billion

Switzerland is a small but incredibly wealthy European nation long famous as an offshore tax haven for wealthy investors. The Swiss enjoy high employment, longer-than-average life expectancy and rank among the happiest nations in the world [source: OECD]. The Swiss — or at least Swiss banks — are also one of the most reliable buyers of U.S. debt, routinely among the major investors in U.S. Treasury securities.

The country's tax-haven moniker isn't quite so accurate anymore, either. After much pressure from the U.S. and the European Union, Switzerland's once-strict banking privacy laws have been diminished, lessening its ability to hide money [source: Goetz].

Creditor name: France

Amount of U.S. debt owned: $284 billion

The United States has a long history of owing money to France. The U.S. borrowed money from the European nation during the American Revolution. In February 2024, France owned $182.3 billion of U.S. debt.

Creditor name: Cayman Islands

Amount of U.S. debt owned: $302.6 billion

The tiny Cayman Islands is one of the biggest owners of U.S. debt, mostly because of the hedge funds on the island. With an estimated half of the world’s hedge funds domiciled in the Cayman Islands, the $302.6 billion is inflated.

Creditor name: Ireland

Amount of U.S. debt owned: $316.9 billion

Ireland doesn't spring to mind when you ponder which countries own a lot of U.S. debt. After all, the small island country is better known as the home of leprechauns and Guinness beer. But it's also home to many U.S. multinational companies like Alphabet/Google, which settle there due to the country's low corporate tax rates and other mechanisms that have allowed companies based in Ireland to reallocate profits to tax havens like Bermuda and pay zero corporate tax.

However, change is afoot.

After watching companies such as Google shift billions of dollars of profit to tax havens, the G7 announced a minimum global corporate tax of 15 percent in June 2021, something Ireland has vigorously protested. Other countries, too, are changing their rules regarding the taxation of foreign earnings. How this all plays out on the global stage remains to be seen [sources: Sebastian, Subramanian].

Creditor name: Belgium

Amount of U.S. debt owned: $320 billion

We know what you're thinking: Belgium? Really? The gross domestic product (GDP) of this small European nation tucked between France, Germany and the Netherlands ranks No. 25 in the world, behind Sweden and Norway [source: Statistics Times]. So why is Belgium one of the top 10 purchasers of U.S. debt?

Belgium has made a name for itself as one of Europe's most vibrant international banking centers. Bank accounts here historically offered a high degree of secrecy, although that changed in 2011 when the Belgian government began disclosing account information to improve tax transparency [source: Hyslop].

In addition, there's something called "custodial bias" at work. Belgium's status as a tax haven makes it a popular place to buy U.S. debt. And investors do just that, whether they live in nearby France and Germany, or far-flung locales such as China and Japan. But the U.S. Treasury tracks purchases of U.S. debt by geographic origin, not the specific nationality of the buyer [source: U.S. Treasury]. Thus, the amount of the debt ascribed to Belgium that is actually owned by Belgians is difficult to discern.

Creditor name: Canada

Amount of U.S. debt owned: $353.8 billion

Canada has owned an increasing amount of the U.S.’s debt in recent years. In 2012, Canada did not rank within the top 10 or even top 15. But between January 2009 and July 2012, Canada’s debt ownership increased by 561.9 percent.

Creditor name: Luxembourg

Amount of U.S. debt owned: $379 billion

A nation of bankers, itsy-bitsy Luxembourg has the third-highest gross domestic product (GDP) per capita in the world — $125,006 in 2022 — and has no reservations about investing in other nations' cheap debt. Yet Luxembourg's own economic stability is up for debate. While it owns $379 billion of U.S. debt, the tiny country owes more than $4 trillion to its own foreign creditors. That ranks tiny Luxembourg No. 6 on the global list of total foreign indebtedness [sources: The World Bank, The World Bank].

Like its neighbor, Belgium, Luxembourg is a tax haven for wealthy foreign investors. Also like Belgium, investors from around the world buy U.S. debt through accounts based in Luxembourg. Since the U.S. Treasury doesn't distinguish between debt bought by bona fide Luxembourgians and debt bought by foreigners, Luxembourg's debt ownership figures may be artificially inflated.

Creditor name: United Kingdom

Amount of U.S. debt owned: $700.8 billion

The United Kingdom (U.K.) is on a roll when it comes to owning U.S. debt. The U.K. is the world's sixth-biggest economy, with a $2.2 trillion GDP in 2023, powered by a strong service sector (finance, insurance and business services). Yet at the start of 2020, the U.K. officially separated from the European Union (EU) in a move nicknamed Brexit.

Brexit means the U.K. is no longer part of the EU's free trade agreement. Partly due to this, many businesses subsequently moved their headquarters out of the U.K. and into EU countries. In addition, Scotland, which voted against Brexit, is contemplating separating from the U.K. and joining the EU as an independent country. While the U.K. and EU did reach a trade agreement in 2021, its economic future is still uncertain [source: Amadeo].

Creditor name: China

Amount of U.S. debt owned: $775 billion

With 1.4 billion people, the world's second-largest economy and rapid economic growth, mainland China is an undisputed economic powerhouse [source: World Bank]. China is also the foreign country that owns the second-most U.S. debt. The question is: Is it bad for the U.S. economy or national security that one of America's biggest rivals owns a sizable amount of its debt [source: Investopedia]?

You might compare it to the arms race between the former Soviet Union and the United States during the Cold War. Sure, either side could have launched its warheads and inflicted terrible damage on the enemy, but an act of aggression would have ensured an equally punishing retaliation.

If China wanted to economically injure the U.S. by selling off its debt securities, the result could be dramatically higher interest rates and a steep devaluation of the dollar. But the Chinese would also shoot themselves in the foot. The Chinese have close to half of their cash reserves invested in U.S. debt [source: Davidson]. For China, it's the safest, best investment the growing nation can make. The return on their U.S. investment partly fuels China's economic growth. Poisoning the dollar would take the yuan right down with it [source: Capaccio].

Creditor name: Japan

Amount of U.S. debt owned: $1.17 trillion

We've been talking a lot about America's debt problem, but how does U.S. indebtedness compare to other industrialized nations? The most useful debt measurement is to calculate the ratio of public debt to gross domestic product (GDP). At the end of 2020, U.S. public debt totaled 107.6 percent of the GDP, meaning the U.S. borrowed more than what it earned that year. And while 2020 was the year the COVID-19 pandemic ruined economies around the globe, that figure wasn't a huge anomaly, as it was 106.9 percent in 2019 [source: Trading Economics].

Although a 107.6 percent debt-to-GDP ratio isn't ideal, it's a heck of a lot better than the situation in Japan, where public debt represented a mind-blowing 246 percent of GDP in [source: Commodity]. How can the Japanese economy support such a lopsided debt-to-earnings ratio?

It turns out that Japan's debt, while incredibly high, is not unsustainable. It boasts the world's fourth-largest GDP, and unemployment was a mere 2.6 percent in 2023. The country is also heavily invested in U.S. debt securities, some of the most financially sound investments in the world.

But the biggest difference between Japanese and American debt is that Japanese citizens own 90 percent of their country's debt, with only 10 percent in the hands of foreigners. In contrast, foreign investors own a larger percent of U.S. debt, making it a far riskier proposition [source: Oh].

Creditor name: American Public and State and Local Governments

Amount of U.S. debt owned: $6.8 trillion (as of December 2022)

Surprise! The country the United States is most indebted to is ... itself. As of December 2022, here are some of the domestic investors who owned U.S. Treasury Securities [source: U.S. Department of the Treasury]:

Why would individual Americans, businesses and local governments continue to loan money to the United States? Doesn't it seem risky to put money into an institution that's already $34 trillion in the hole?

Believe it or not, investing in the government isn't a high-risk proposition. While the federal government is hemorrhaging thousands of dollars by the second to pay interest on its debts, the U.S. has a vested interest in not defaulting on its loans. America's credit rating would drop, and the booming market for U.S. debt could dry up.

How would the U.S. government function without its international credit card? Let's hope we never find out.