US Treasury Secretary Scott Bessent has called for calm amid rising tensions between the United States and Europe over President Donald Trump’s push to take control of Greenland. Speaking at the World Economic Forum in Davos, Bessent urged allies to respect existing trade agreements and rejected claims that Europe could retaliate by selling US Treasuries.
“I am confident that leaders will not escalate this situation and that it will be resolved in a positive way,” Bessent said during a press conference on Tuesday.
Bessent compared the current backlash over Greenland to what he described as market “hysteria” following Trump’s announcement of sweeping tariffs last year. He said similar fears at that time eventually eased and advised markets to remain patient.
“This is the same kind of panic we saw earlier,” he said. “People should take a step back, stay calm, and allow events to unfold.”
However, Bessent’s comments also highlight the growing pressure facing Trump as he arrives in Davos on Wednesday. Trump has warned of new tariffs on US allies that oppose his Greenland plan and said he plans to meet with multiple leaders to discuss the issue.
The tariff threat has raised alarm across Europe. French President Emmanuel Macron has suggested using the European Union’s anti-coercion tools to respond, while German Chancellor Friedrich Merz has taken a more cautious approach and played down the idea.
When asked about speculation that European countries could sell US Treasuries as a countermeasure, Bessent strongly dismissed the idea. He called the reports a “false narrative” and said such action would make no sense.
European governments and institutions hold trillions of dollars in US bonds and equities. Some market watchers fear that selling these assets could push US borrowing costs higher and weaken stock markets, as the US relies heavily on foreign investment.
Still, most analysts believe such an extreme move is unlikely. Europe has shown reluctance to directly challenge Trump since his return to power, and selling US assets would mark a major escalation turning a trade dispute into a financial conflict that could shake global markets.
Bessent also reaffirmed the United States’ commitment to NATO, saying US membership in the alliance remains firm.
“Our commitment to NATO is unquestioned,” he said, adding that disagreements over Greenland do not change that position.
As Trump prepares for high level meetings in Davos, investors and policymakers will be closely watching how the Greenland issue unfolds and whether it adds further pressure to global markets.
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