Foreign ownership of United States debt has seen some dramatic fluctuations, illustrating the very different economic situation in countries and regions around the world. As of March, the UK holds an eye-popping $779 billion in US debt. This new temporary funding—$113 billion—represents a massive $29 billion increase from last month. By comparison, Luxembourg’s investments have not fluctuated—they are consistently $412 billion dollars. This dramatic increase and subsequent decrease show the changing realities of international finance as global economic strategies transform.
The Cayman Islands garnered media attention by announcing this past spring that its reported holdings surged by 33 times. They increased them by $37 billion, raising the total to an eye-popping $455 billion. At the same time, Ireland’s standing slid back by $10 billion to $329 billion. Belgium’s holdings increased by a huge $7 billion to $402 billion. At the same time, Switzerland had the largest increase, up $21 billion to reach a total of $312 billion.
Canada has generated the most headlines, though, with record-shattering increases in its US debt positions. In February, Canada added a stunning $55 billion. Then in March, it added another $20 billion, bumping it up to $426 billion. This trend is a sign of increasing demand from Canadian investors for US Treasury securities as markets continue to undergo change and uncertainty.
To make matters worse, total US debt just shot up to another all-time high of $36.2 trillion. As foreign ownership decreases, domestic buyers are being left to pick up the slack. As it stands now, the total foreign share of US debt sits at an all-time high of $9.05 trillion. This is a major shift from years past when foreign investment was far more pronounced on the battlefield.
Since March 2021, holdings have quadrupled! Since 2012, holdings have octupled! More than anything, Wolf told us, this reflects the incredibly fast growth of these foreign investments over the last ten years.
Japan’s trade balance is already under significant strain from possible US tariffs which endanger its nascent recovery. Japan too has returned to a positive trade balance for the first time in decades. Today, it continues to face the crosswinds of drumbeat of anti-trade sentiment. This ongoing situation highlights the careful line between international trade partnerships and domestic economic interests.
China is already feeling the pain in its exports, particularly to the eurozone. These constraints drastically limit its ability to transfer goods to foreign countries. These limitations could provoke changes in the way China handles its foreign currency reserves and investments in US debt.
Wolf added the resilience of the US Treasury market in light of renewed fears of foreign investors retreating. Both the dollar value and the 9.7% percentage were higher than in March. In April, fueled by the anti-tariff clickbait brigade, rumors circulated that foreigners were staging a Treasury auction boycott to teach the US government a lesson for the tariffs. With that information, he blasted those largely speculative rumors out of the water.
The evolving picture of the composition of foreign holdings of US debt shows a surprising but important set of trends shaping the global finance environment. As countries respond to both domestic and global economic pressures, their investment strategy responds and so does their investment in US securities.