Donald Trump warned European governments that selling U.S. financial assets would trigger harsh payback from Washington. He spoke while global leaders were gathered in Davos, with markets already tense over trade and security talks tied to Greenland.
The threat came after talk spread in Europe about dumping U.S. assets as a counter to tariff pressure. Trump spoke on Fox Business during the World Economic Forum and made it clear he was not bluffing.
“If they do, they do. But you know, if that were to happen, there would be a big retaliation on our part,” he said. “And we have all the cards.” He did not explain what steps the United States would take.
Tariff pressure over Greenland fuels market fears
The comments followed an earlier plan by Trump to raise tariffs on goods from eight European countries. The goal was to force progress on Greenland. That plan was later dropped, but the damage was done.
Investors began to talk about Europe selling large amounts of U.S. bonds and stocks. Some estimates ran into the trillions of dollars. Even the idea alone was enough to shake nerves, with markets already unsettled by the Greenland push.
A draft framework helped cool the crisis. Under that outline, Trump agreed to pause new tariffs on European products. In return, the United States would place missile systems in Greenland, a semi-autonomous Danish territory.
The deal also covered mineral rights designed to limit Chinese involvement. NATO would expand its presence on the island. The arrangement aimed to lock down security and resources at the same time.
Before that framework emerged, some European investors had already started to pull back. Denmark’s AkademikerPension said it would sell about $100 million of U.S. Treasuries. Greenland’s SISA Pension said it was reviewing whether it should keep money in U.S. stocks. These sums were small next to the total U.S. markets, but they sent a signal that confidence had been hit.
European funds test limits as US officials dismiss risks
A full “Sell America” push faces real limits. Most U.S. assets held in Europe sit with private funds, not governments. That makes coordinated action hard. Still, a few players are big enough to matter. Norway’s sovereign wealth fund is one of them. A large sale from such a fund could hit U.S. markets.
U.S. Treasury Secretary Scott Bessent brushed off the Danish sale. He said it did not point to a wider pullback. “Denmark’s investment in U.S. Treasury bonds, like Denmark itself, is irrelevant,” Scott said in Davos. “They’ve been selling Treasuries for years.” He added that he was “not concerned at all.”
Global investors also played down the Danish move. European pension funds still hold far more U.S. corporate debt and equities than government bonds. As long as those bigger holdings stay in place, markets tend to stay calm.
A Deutsche Bank report warned about Europe using U.S. assets as a weapon. Scott rejected that idea outright. He said it “defies any logic” and told reporters that the bank’s chief executive had called him to dismiss the claim. He again minimized AkademikerPension’s decision.
The structure of European pension funds explains part of the story. Funds like AkademikerPension have liabilities in local currencies. That makes U.S. Treasuries less useful for them. They usually favor debt issued closer to home for fixed income.
So far, walking away from all U.S. assets has gone nowhere. Before Trump announced weekend tariffs tied to Greenland, AkademikerPension’s chief investment officer, Anders Schelde, said dumping everything would be a major call. He said it did not make sense based on what he called unpredictable statements from Trump.
The biggest public holder in Europe remains Norway’s fund. It owns more than $180 billion in U.S. Treasuries. That is large, but far smaller than its $759 billion stake in U.S. stocks. Norway’s finance minister, Jens Stoltenberg, said on Bloomberg TV that the $2.1 trillion fund has no reason to cut U.S. exposure now, even as Trump keeps the pressure on.
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