BarcelonaDonald Trump’s threats against European allies, both territorial—a possible annexation of Greenland—and commercial—with more tariffs—have, for the moment, been put on hold after the US president backed down a week ago. Despite this de-escalation, European states anticipate renewed tensions with Washington and are studying measures to counter US attacks on the continent’s countries, especially the member states of the European Union. One lever that EU governments and institutions can use is the strong dependence of the US government and US companies on their European partners. In the case of private companies, many US-based multinationals are deeply integrated into European economies through customers, suppliers, and investors who buy their shares and corporate debt. Similarly, a very large portion of US public debt held by foreigners is spread throughout Europe. If investors and governments in EU countries were to suddenly divest themselves of these assets, the global economy could suffer seriously, but especially the US economy.

Actius nord-americans controlats a la UE

Productes financers emesos per entitats dels EUA controlats per inversors públics i privats amb seu a la Unió Europea. En bilions d’euros del novembre del 2025

According to data from the US Treasury Department last November, European countries—both EU members and non-members such as the UK, Norway, and Switzerland—hold a significant amount of US government debt, in addition to another $225 billion in bonds issued by public agencies. These figures include securities held by both public institutions and private European investors and represent more than 40% of US bonds held abroad. Among these countries, the UK holds the largest amount, with $888 billion, as expected given the enormous financial weight of the City of London. Belgium—home to the EU institutions—and France hold $481 billion and $376 billion in US Treasury bonds, respectively, followed by Ireland. hub A major financial center with close ties to the United States, with $340 billion. Germany, the continent’s largest economy, holds $110 billion in US public debt, while Luxembourg – home to many companies due to its low taxes – holds $426 billion.

Outside of Europe, Japan holds approximately $1.2 trillion in US debt securities; China, approximately $683 billion; Canada, approximately $472 billion; and the Cayman Islands (a British Overseas Territory), approximately $427 billion. To these figures must be added corporate debt and other financial assets—primarily shares of private US companies—held by EU investors, totaling an additional $2 trillion and $6 trillion, respectively. Thus, EU governments, companies, and citizens control more than $10 trillion in US financial assets, including government debt, private debt, and other financial products issued by US-based entities. This dependence, however, is mutual and, if the situation remains calm, beneficial to all. The US depends on Europeans for financing, and Europeans are willing to lend them money through investments in bonds and stocks because, at least until now, they consider the US the world’s largest economy for obtaining low-risk profits, especially given that the dollar is a safe-haven currency. Trump’s escalating rhetoric, diplomacy, and trade policies are eroding the trust of the EU and other traditional partners in the United States, such as Canada and Japan. In fact, a few weeks ago, international financial media reported on the sale of large quantities of US Treasury bonds by Scandinavian investment and pension funds.

Flight to Europe

During the past week, as the Trump administration escalated its rhetoric in the days leading up to its visit to the Davos Forum in Switzerland, financial markets on both sides of the Atlantic felt the effects of Trump’s policies. On the US side, stock markets fell, government debt became more expensive, and the dollar weakened. On the European side, the opposite occurred: stock markets and currencies like the euro and the Swiss franc rose. This meant that many investors sold off US stocks and bonds and sought refuge in Europe, a trend that was broken when the US president declined to use military force against Greenland and withdrew the tariffs he had announced against several European countries.

“With such a huge level of debt, it is in the US’s interest for its currency to be stable, because if investors perceive greater risk or greater volatility, they may demand higher returns to buy long-term debt, which makes mortgages, credit, and government financing more expensive,” explains Omar Rachedi, professor of economics. For the moment, the dollar has lost value since Trump returned to the White House a year ago, but It is still far from its historic lows.

If the US government were to increase tariff and geopolitical (or even military) pressure on the EU, divesting itself of the US assets it controls could damage US public finances and financial markets, while also meaning that European investors would most likely have to sell them at prices lower than what they paid for them. In other words, there would be losses on both sides. A second problem would be coordinating the sale, which would be possible between governments, but much more complicated with the thousands of private investors—from individuals to large banks and investment funds—who hold portfolios exposed to the United States.

The other question is: to whom would they sell them? Should relations between Europe and the US deteriorate to the point of forcing a massive asset sale, confidence in the US would evaporate not only in Europe, but also in the rest of the world.

Therefore, it is not expected in the short term that Europeans will coordinate a financial attack against the US by selling assets, not even Treasury bonds. It is expected, however, that this deterioration in trade relations will intensify as relations between Washington and Brussels worsen, and, in the long term, that interdependence between the two sides of the Atlantic (and the resulting benefits) will decrease.