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How Europe Could 'Weaponize' $10 Trillion of US Assets Over Greenland
As Europe considers how best to respond to US President Donald Trump’s latest threats over Greenland’s sovereignty, there’s one extreme potential countermeasure that’s fueling debate among investors.
European countries hold trillions of dollars of US bonds and stocks, some of which sit with public sector funds. That’s spurring speculation they could sell such assets in response to Trump’s renewed tariff war, potentially driving borrowing costs up and equities down given US reliance on foreign capital.
But that’s easier said than done. The bulk of these assets are held by private funds outside the control of governments, and in any case such a move would likely hurt European investors too. Most strategists therefore believe there’s a low chance policymakers would ultimately go so far, given their broad reluctance to stand up to Trump since his return to power a year ago.
The mere fact that Deutsche Bank AG’s chief global currency strategist is nevertheless openly talking about the “weaponization of capital” shows such retribution is becoming a tail risk for markets, as Trump’s expansionist policies redraw the geopolitical landscape. US assets held within the European Union amount to over $10 trillion, according to US Treasury data, with more in the UK and Norway.
European countries hold trillions of dollars of US bonds and stocks, some of which sit with public sector funds. That’s spurring speculation they could sell such assets in response to Trump’s renewed tariff war, potentially driving borrowing costs up and equities down given US reliance on foreign capital.
But that’s easier said than done. The bulk of these assets are held by private funds outside the control of governments, and in any case such a move would likely hurt European investors too. Most strategists therefore believe there’s a low chance policymakers would ultimately go so far, given their broad reluctance to stand up to Trump since his return to power a year ago.
The mere fact that Deutsche Bank AG’s chief global currency strategist is nevertheless openly talking about the “weaponization of capital” shows such retribution is becoming a tail risk for markets, as Trump’s expansionist policies redraw the geopolitical landscape. US assets held within the European Union amount to over $10 trillion, according to US Treasury data, with more in the UK and Norway.
https://www.bloomberg.com/news/articles/2026-01-19/-weaponizing-10-trillion-of-us-assets-is-tough-ask-for-europe?srnd=homepage-americas
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