“Denmark’s investment in U.S. Treasury bonds, like Denmark itself, is irrelevant,” U.S. Treasury Secretary Scott Bessent told reporters at Davos on Wednesday.
The “sell America” trade was in full swing Tuesday after President Donald Trump and European leaders escalated tensions over Greenland. U.S. stocks and bond prices tumbled, sending yields spiking.
It comes as Trump’s threats to impose 10% tariffs on eight European countries as part of his push to take over Greenland spooked markets. The levies would come into force on Feb. 1, Trump said, and later rise to 25%.
Europe’s holdings in U.S. treasuries, however, have been tipped as a potential countermeasure.
Danish pension operator AkademikerPension said Tuesday it was selling $100 million in U.S. Treasurys. The decision was driven by “poor [U.S.] government finances,” said Anders Schelde, AkademikerPension’s investing chief.
When Bessent was asked how concerned he is about European investors pulling out of treasuries, Bessent said at a press conference at the World Economic Forum: “Denmark’s investment in U.S. Treasury bonds, like Denmark itself, is irrelevant.”
“That is less than $100 million. They’ve been selling Treasuries for years, I’m not concerned at all.”
Bessent added that the U.S. has had “record foreign investment” in its Treasurys.
He suggested that the Japanese bond sell-off following the announcement of a snap election in the island state, has “spilled over to other markets.”
The “notion that Europeans would be selling U.S. assets came from a single analyst at Deutsche Bank,” Bessent said, which was then amplified by “the fake news media.”
The Jan. 18 note stated that the “US has one key weakness: it relies on others to pay its bills via large external deficits.” At the time, European countries held $8 trillion of U.S. bonds and equities.
“In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” said George Saravelos, global head of FX research at the German bank.
He added, “Danish pension funds were one of the first to repatriate money and reduce their dollar exposure this time last year. With USD exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing.”
Bessent told reporters on Wednesday that the CEO of Deutsche Bank called to say that the German bank “does not stand by that analyst report.”
A Deutsche Bank spokesperson told CNBC that the company generally does not comment on “potential communication between the bank and government representatives.”
“As a matter of long-standing policy, Deutsche Bank Research is independent in their work, therefore views expressed in individual research notes do not necessarily represent the view of the bank’s management,” the spokesperson said.
Europe should ‘sit down and wait’ for Trump
The U.S. has deemed Greenland a national security concern as the Arctic warms and new trade routes emerge, opening the floor for a potential power play between the U.S., Russia and China. The Trump Administration has said it wants to avoid that conflict.
“We are asking our allies to understand that Greenland needs to be part of the United States,” Bessent told reporters.
″[We have] always considered ourselves as an ally of the U.S. and have tried to accommodate the needs from the U.S. over the years and done so happily,” Nathanielsen said via video call.
“To all of a sudden find ourselves in the midst of a storm that’s about acquiring us like a product or a property, it’s really difficult for us — not to mention the threats of military action and an actual occupation of our country.”
Politicians on the island have said Greenland is open for business — but it is not for sale.
Bessent added that U.S. bought the U.S. Virgin Islands from Denmark during the First World War because they “understood” the islands’ importance.
“President Trump has made it clear that we will not outsource our national security or our hemispheric security to any other countries,” Bessent said. “Our partner, the U.K., is letting us down with the base on Diego Garcia, which we had shared together for many, many years, and they want to turn it over to Mauritius. So, President Trump is serious here.”
“Just as I said after liberation day last year, I would tell everyone, ‘take a deep breath, do not have this reflexive anger that we’ve seen, and this bitterness.’ Why don’t they sit down and wait for President Trump to get here and listen to his argument, because I think they are going to be persuaded.”
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— CNBC’s Sam Meredith contributed to this report.
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