President Donald Trump has issued a stern warning to European nations, signalling an aggressive response should they begin offloading American stocks and bonds in retaliation for US trade or security policies.
"If that would happen, there would be a big retaliation on our part," he told Fox Business on Thursday when questioned about potential European financial pushback.
He emphasised his administration's confidence by stating that the US holds "all the cards" in economic disputes.
The comments follow news that AkademikerPension, a Danish fund, confirming that it would divest $100 million in US Treasury.
While the fund cited fiscal concerns rather than politics, the move coincides with renewed American pressure on Greenland.
"The decision is rooted in the poor US government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management," Anders Schelde, chief investment officer of AkademikerPension, told CBS News in a statement.
Schelde claimed that the company's decision was "not directly related to the ongoing rift between the US and Europe," adding, "but of course that didn't make it more difficult to take the decision."
Greenland's SISA Pension is reportedly reassessing its US stock investments.
Treasury Secretary Scott Bessent stated at the World Economic Forum in Davos he was unconcerned by Denmark's sell-off of US Treasuries.
"Denmark's investment in U.S. Treasury bonds, like Denmark itself, is irrelevant," he said, CNBC reported. "That is less than $100 million. They've been selling Treasuries for years, I'm not concerned at all."
Tussle over Greenland
Markets have been whipped by volatility this week after the US president said at the weekend he would hammer several nations — including Germany, France, Britain and Denmark — with levies for their pushback against his grab for the North Atlantic island.
The threat sparked a warning of retaliation, with French President Emmanuel Macron raising the possibility of deploying an unused, powerful instrument aimed at deterring economic coercion, fanning fears of a trade war between the economic giants.
But traders breathed a sigh of relief on Wednesday when the US president told the World Economic Forum in Davos that he would not take the Danish autonomous territory by force — as he had hinted — and later said he had retracted his tariff threat.
Following a meeting with NATO Secretary General Mark Rutte, Trump announced a framework deal for Greenland and withdrew threats of imposing tariffs against several European countries.
Foreign investment aids the US in funding its debt obligations.
European nations hold $8 trillion in US bonds and equities, almost twice the total held by the rest of the world combined.
According to the US Treasury Department, some of the largest foreign holders of US debt include Japan, the UK, and China.
