Treasury Secretary Scott Bessent downplayed worries about a potential drop in U.S. debt following President Trump’s escalating threats regarding Greenland, labeling Denmark as “irrelevant.”
The announcement of new 10% tariffs on several European nations opposing the Greenland takeover sent shockwaves through global markets on Tuesday, which marked the first trading day of the week. These tariffs are set to increase to 25% by February 1, adding to the existing 15% tariffs on most European imports.
This uncertainty caused stocks to drop significantly, bond prices weakened, and U.S. Treasury yields surged as investors grew anxious over escalating geopolitical tensions, potentially prompting European investors to retreat into U.S. government bonds.
“Denmark’s investment in U.S. debt is as irrelevant as Denmark itself,” Bessent stated during a press briefing at the World Economic Forum in Davos, Switzerland.
“This is less than $100 million. They’ve been unloading Treasuries for years; I’m not worried at all,” he continued.
Bessent pointed to a single analyst’s comments from Deutsche Bank, suggesting that the notion of Europeans selling American assets was exaggerated, claiming it’s been further fueled by “fake news media.”
George Saravelos, Germany’s global head of foreign exchange research, stated in a recent memo that the U.S. has a vulnerability tied to its reliance on foreign countries to finance its deficits.
According to Saravelos, European nations hold approximately $8 trillion in U.S. bonds and stocks and questioned why Europeans would actively participate in such a role amidst deteriorating geoeconomic stability within the Western alliance.
Bessent mentioned that the CEO of Deutsche Bank reached out to him to clarify that he does not endorse the analyst’s report.
Deutsche Bank has not provided immediate comments regarding these discussions.
A representative from the bank noted that the institution generally refrains from commenting on potential communications with government officials.
Blaming the rise in U.S. bond yields on a selloff of Japanese government bonds, Bessent indicated that this movement affected other markets as well. The Japanese selloff was purportedly triggered by worries over fiscal policies.
Bessent emphasized the “record foreign investments” currently present in the U.S. Treasury Department.
President Trump, he stated, considers Greenland’s strategic location between North America and the North Pole crucial for monitoring shipping routes and potential military threats.
The President has persistently argued for U.S. ownership of the island due to national security concerns, citing dangers from nations like Russia and China.
Bessent remarked that it’s important for allies to recognize the necessity of Greenland becoming part of the U.S.
In response, Greenlandic citizens have protested vehemently, donning red hats that read “Make America Go Away” in a parody of Trump’s MAGA slogan. Local politicians have also voiced their disapproval of the proposed sale.
The U.S. last purchased land from Denmark in 1917, acquiring the U.S. Virgin Islands, which included what would later be known as Jeffrey Epstein’s infamous island.
Bessent asserted that this historical purchase demonstrates how seriously the U.S. regards such territories.
“President Trump has made it clear we will not rely on another country for our security,” Bessent stated. He added that the U.K. has let the U.S. down by suggesting they hand over their base in Diego Garcia to Mauritius. “President Trump is serious about this.”
Bessent concluded with an appeal, urging people to avoid immediate reactions and to take time to consider Trump’s arguments, as he believes they may find them persuasive.
