US Treasury Secretary Scott Bessent has dismissed as "media hysteria” concerns that the UK and EU could dump US Treasuries in retaliation for the proposed takeover of Greenland.
“The media has latched on to this. I think it is a completely false narrative. It defies any logic,” he said when asked about the speculation by The National at the USA House in Davos, where he is attending the World Economic Forum Annual Meeting.
“If you look, the US Treasury market was the best-performing market in the world, or the best G7-performing bond market, and we had the best performance since 2020. It is the most liquid market. It is the basis for all financial transactions and I am sure that the European governments will continue holding it.”
The central banks of France, Germany and the UK hold as much as $1.35 trillion of US Treasuries between them. The “nuclear option” would see Europe and the UK sell off US Treasuries in retaliation for any move by the Trump administration to take over Greenland. Such a move could result in higher borrowing costs, market volatility and a weaker dollar, but Mr Bessent said the threat of a sell-off has no basis in reality. “There is no talk in European governments,” he added.
Mr Bessent said Washington was not worried about any retaliatory financial measures over Greenland, pointing to the US Treasury market's strong performance and liquidity.
"If they [the EU and UK] sell Treasuries, then they would have to buy [Chinese] RMBs and it would strengthen their currency. And they've been doing just the opposite," he said, implying that such a move would not be in Europe's best interests. “I think everyone needs to take a deep breath."
His comments came a day before US President Donald Trump’s visit to Davos and against the backdrop of rising tensions among European allies over the future of Greenland. At the weekend, Mr Trump threatened the EU and UK with higher tariffs if they refused to accede to his demands to “take” Greenland. Notably, many world leaders this year chose to stay away from WEF meeting, including the Danish delegation.
