Is Europe selling US debt
Executive summary
European institutions are not conducting a coordinated, continent‑wide sell‑off of U.S. Treasuries; data through late 2025 shows continued net foreign inflows into U.S. sovereign debt even as isolated European pension funds and investors consider or execute small divestments amid geopolitical rows with Washington [1] [2]. Market moves—higher U.S. yields, a weaker dollar and a flight into gold—reflect broad risk repricing and rising global appetite for alternatives rather than an organised European “weapon” campaign to dump U.S. debt [3] [1] [4].
1. What the headlines are missing: some European selling, but not a coordinated strike
Stories of a dramatic “sell America” campaign over Greenland and tariff threats have been amplified by rhetoric from political leaders and analysts, and by a handful of decisions such as Danish AkademikerPension’s plan to offload roughly $100 million of U.S. Treasuries, but macro data through November show foreign holdings of U.S. Treasuries at record highs and continued inflows rather than mass exits from Europe [2] [1]. Reuters notes “no signs of European selling since Liberation Day,” undercutting the idea of an organised continent‑level sell‑off [1].
2. Why some investors are trimming U.S. exposure: risk repricing, not always politics
Market participants point to rising U.S. yields and changing risk premia as reasons investors are reassessing dollar and Treasury exposure—10‑ and 30‑year yields climbed and bond prices sold off amid the recent political flare‑ups—so much of the movement can be explained by financial logic rather than explicit retaliation [4] [5] [3]. Analysts caution that higher yields and fiscal deficits, not only geopolitical squabbles, are driving flows [5].
3. The scale question: how much do Europeans actually hold?
Estimates vary widely in reporting: some commentators cite roughly $8 trillion of U.S. bonds and equities linked to Europe as a region, framing it as a potential lever [6], while other outlets point to lower headline figures—such as the New York Times noting some categories like Treasury debt around $2 trillion—reflecting differences in what assets are counted and where holdings are booked [7]. Financial markets’ plumbing also complicates headline ownership: big trading centers in Europe can host assets that belong to outside investors, so “European” holdings on paper can overstate politically actionable stock [1].
4. Political threats and official pushback: bluster meets prudence
U.S. officials have publicly downplayed the threat of retaliatory financial disruption—Treasury Secretary Scott Bessent dismissed concerns about Denmark’s holdings as “irrelevant” in media appearances—while President Trump warned of retaliation if Europe sold Treasuries, creating a public clash between rhetoric and institutional assessments [8] [2] [7]. European leaders, meanwhile, have signalled political resolve and floated non‑market responses such as the EU’s Anti‑Coercion Instrument, rather than openly coordinating a bond strike [8] [7].
5. Practical and economic counter‑arguments to a European sell‑off
Economists and market strategists emphasise that a wholesale European dump of Treasuries would boomerang: it would push down bond prices, raise yields globally, and inflict economic pain on European investors and banks that rely on dollar markets, making it a self‑harmful policy tool—logistical difficulty and undesirable side effects are frequently cited in analysis [4] [9]. Some commentators propose longer‑term structural responses—building deeper euro‑denominated safe assets or easing rules to let pension funds rebalance—that would be less disruptive than a public, immediate sell‑off [10].
6. Bottom line: isolated divestments and market turmoil, not a Europe‑wide sell strategy
The facts assembled by multiple outlets show a market reacting to policy shocks and macro fundamentals, with isolated European divestments and louder political talk but no empirical evidence of a coordinated European campaign to sell U.S. Treasuries en masse; data through late 2025 point to continued foreign demand for U.S. debt even as investors reassess exposure [1] [2] [4]. Where the story may evolve is in slower structural moves—development of euro safe‑assets or regulatory nudges—that would reshape demand over months or years rather than overnight; current reporting does not document such a continent‑wide, immediate sell‑off [10] [1].