Bessent urges calm over Greenland, downplays treasuries threat

US Treasury Secretary Scott Bessent urged calm amid a growing transatlantic rift over President Donald Trump’s ambitions to take over Greenland, calling for allies to honour their trade agreements and dismissing suggestions that Europe would forcefully retaliate by dumping US treasuries.

“I am confident that the leaders will not escalate, and that this will work out in a manner that ends up in a very good place,” Bessent said Tuesday during a press conference at Davos, where he is attending the World Economic Forum.

Bessent likened the uproar over Greenland to what he called the “hysteria” that followed Trump’s announcement in April of last year of sweeping country-by-country tariffs which sparked a fierce market and political blowback.

“This is the same kind of hysteria that we heard on April 2,” he said. “There was a panic. And what I’m urging everyone here to do is sit back, take a deep breath, and let things play out.”

Still, Bessent’s defensive posture highlighted the firestorm awaiting Trump when he is expected to arrive in Davos on Wednesday following his threat of tariffs against allies who have opposed his bid to acquire the Danish territory of Greenland. Trump said earlier Tuesday that he would meet with various parties to discuss the matter.

The tariff threat sparked alarm from European allies and talk from French President Emmanuel Macron of unleashing the European Union’s anti-coercion instruments to push back on the US, though German Chancellor Friedrich Merz tamped down on that idea.

Asked about reports of Europe possibly selling US treasuries, a potential countermeasure that would have seismic impacts on markets, Bessent dismissed that speculation as a “false narrative.”

“It defies any logic and I could not disagree more strongly on that,” he told reporters.

European countries also hold trillions of dollars of US bonds and stocks, some of which sit with public sector funds. That’s spurring speculation they could sell such assets in response to Trump’s renewed tariff threats, potentially driving borrowing costs up and equities down given US reliance on foreign capital.

But most market strategists believe there’s a low chance policymakers would ultimately go so far, given their broad reluctance to stand up to Trump since his return to power a year ago. And any weaponization of European holdings of US assets would represent a severe escalation. In effect, it would expand a simmering trade war — which investors largely shrugged off last year — with a financial conflict that directly impacts capital markets.

“What President Trump is threatening on Greenland is very different than the other trade deals, so I would urge all countries to stick with their trade deals. We have agreed on them, and it does provide great certainty,” Bessent said.

Bessent also sought to reaffirm the US commitment to NATO, saying that US membership in the security bloc was “unquestioned.”

“That does not mean we cannot have disagreements on the future of Greenland,” he added.

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