The U.S. Bureau of Economic Analysis (BEA) announced that the United States’ net international investment position (IIP) which is the difference between U.S. residents’ foreign financial assets and their liabilities to foreign residents—was –$21.96 trillion at the end of the first quarter of 2025. This represents a decrease of $376.7 billion, or 1.7%, compared to the end of the fourth quarter of 2024.
Changes in Assets and Liabilities
U.S. assets held abroad totaled $36.99 trillion, a reduction of $1.01 trillion, or 2.7% from the previous quarter.
U.S. liabilities, representing foreign investments in the United States, also fell to $58.95 trillion, down $638.5 billion, or 1.1%.
The overall decrease in the net IIP is primarily due to a greater decline in U.S. assets compared to liabilities.
Asset Performance Overview
The drop in U.S. assets was driven largely by lower market values of financial instruments, particularly:
Portfolio investment assets (primarily stocks and bonds) fell due to a decline in global equity prices.
Financial derivatives showed significant losses as markets adjusted.
Other investments, including loans and deposits, declined due to exchange rate fluctuations and changes in claims.
Liabilities Overview
The fall in U.S. liabilities was also influenced by declining market prices for U.S. equity and debt instruments held by foreign investors. This reflects:
Reduced foreign holdings of U.S. stocks due to lower prices in equity markets.
A decline in direct investment liabilities, caused by valuation changes in foreign-owned companies based in the U.S.
Key Drivers of Change
Price changes: Valuation adjustments based on changes in the market price of assets accounted for most of the decline.
Exchange rate effects: A strengthening of the U.S. dollar during the quarter lowered the dollar value of foreign currency-denominated assets.
Financial transactions: Cross-border investment flows continued, but valuation changes had a larger impact on the overall IIP movement.
Annual Revisions
As part of the annual update, the BEA revised statistics for the U.S. International Investment Position from the first quarter of 2014 through the fourth quarter of 2024. Revisions incorporate updated source data, improved estimation methodologies, and changes in classification and presentation standards.
These adjustments ensure greater accuracy and alignment with international statistical standards.
The U.S. net international investment position fell to –$21.96 trillion as of Q1 2025.
The decline reflects market-driven reductions in the value of U.S. foreign assets and, to a lesser extent, in U.S. liabilities.
The annual update has revised prior years’ data to reflect updated methodologies and improved source inputs.
For full tables, data visualizations, and technical notes, please refer to the full report available on the BEA website.
