America's 'Achilles Heel' of national debt is exposed by Trump's Greenland tariff threat, warns Deutsche Bank
President Trump may be overplaying his hand in negotiations for Greenland, economists are warning, after the Oval Office threatened new tariffs on E.U. countries if they did not support America’s demand to purchase the territory.
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This weekend’s power flex may be a stretch too far, economists are now warning, and Trump’s weakness may prove to be America’s voracious spending habits.
Deutsche Bank’s Jim Reid highlighted that Liberation Day tariffs in April were stepped back a week later, after U.S. Treasury yields saw a “scary” session as investors retreated to safety, away from American borrowing.
“Financial markets may play a big part in how this situation resolves itself,” Reid wrote in a note to clients this morning. “The main Achilles Heel of the U.S. is the huge twin deficits. So while in many ways it feels like the U.S. holds the economic cards, it doesn’t hold all the funding cards in a world that will be very disturbed by the weekend’s events.”
Investors, analysts, and world leaders have long wondered when—or if—a debt crisis would occur in one of the nations burdened by a massive deficit. While the likes of Japan, the U.K., and France are by no means balancing their books, America’s $38 trillion deficit dwarfs its counterparts. While a great deal of that debt is held by the public (including the Fed, where President Trump is also in hot water), vast sums are also owned by foreign governments and overseas investors.
more at:
https://fortune.com/2026/01/19/us-achilles-heel-debt-borrowing-deutsche-bank-greenland/