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Trump Warns Europe of ‘Big Retaliation’ Over U.S. Treasury Sell-Offs
The stakes are significant. According to U.S. Treasury data, the European Union holds around $10 trillion in U.S. assets, including stocks and bonds. Analysts note, however, that most of these holdings are controlled by private funds rather than governments, meaning a large-scale sell-off could also harm European investors.
Donald Trump has issued a stark warning to European countries, threatening “big retaliation” if they respond to his trade and security pressure by selling US Treasury bonds. The comments, made on the sidelines of the World Economic Forum (WEF) in Davos, have intensified already volatile transatlantic relations amid a growing dispute over Greenland, tariffs, and global financial leverage.
Speaking to Fox Business, Trump brushed off concerns about potential European divestment, declaring, “We have all the cards,” as he suggested the US would respond forcefully to any coordinated financial pushback.
Danish Funds Begin Divesting U.S. Assets
Trump’s remarks come as several European pension funds signal moves away from U.S. government debt. Denmark’s AkademikerPension announced plans to sell roughly $100 million in U.S. Treasury bonds, while Greenland’s SISA Pension is reportedly reassessing its US stock holdings. Swedish pension fund Alecta has also confirmed that it sold most of its U.S. Treasury exposure over the past year, citing heightened political and market volatility.
Scott Bessent Dismisses Denmark as ‘Irrelevant’ Amid Greenland and Bond Market Tensions
While AkademikerPension stressed that its decision was driven by concerns over U.S. government finances rather than politics, the timing has drawn attention. The divestment coincides with Trump’s renewed push to bring Greenland, a semi-autonomous Danish territory, under US control—an idea that has alarmed European allies.
Tariffs, NATO and a Partial Walk-Back
Over the weekend, Trump threatened to impose 10% tariffs on eight NATO countries, with rates rising to 25% by mid-year if Denmark refused to cede Greenland. The announcement rattled markets and sparked speculation that Europe could retaliate economically, including through selling U.S. bonds and equities.
However, Trump later backed off the tariff threats after reaching a tentative framework agreement with NATO Secretary General Mark Rutte. Details of the deal remain unclear, and Trump has avoided directly confirming whether it includes U.S. control or long-term access to Greenland. “It’s really being negotiated now,” he said in Davos, adding that discussions involve “total access” with no time limit.
Europe Holds Trillions in U.S. Assets
The stakes are significant. According to US Treasury data, the European Union holds around $10 trillion in U.S. assets, including stocks and bonds. Analysts note, however, that most of these holdings are controlled by private funds rather than governments, meaning a large-scale sell-off could also harm European investors.
U.S. Treasury Secretary Scott Bessent downplayed the risk, calling Denmark’s divestment “irrelevant” and stressing that such sales represent a tiny fraction of global Treasury markets.
What Comes Next?
European leaders have floated countermeasures, including new tariffs on U.S. imports and restrictions on American companies, while the EU has already paused implementation of a recent trade deal with Washington. Though markets briefly steadied after Trump’s tariff reversal, uncertainty remains high.
As Greenland, trade policy and financial power become increasingly entangled, Trump’s Davos warning underscores how geopolitical disputes are now spilling directly into global markets—raising the spectre of a broader economic confrontation between the U.S. and Europe.
