Can Europe sell America?

Rising geopolitical tensions between Europe and the United States, particularly regarding friction over Greenland, are prompting European leaders to evaluate their economic leverage. Central to this arsenal is the "anti-coercion mechanism," a legal tool designed to penalize foreign companies or restrict market access beyond traditional trade tariffs. Financial Times editor Robin Wigglesworth notes that while Europe holds a massive $3 trillion in U.S. Treasury bonds—surpassing China’s holdings—the prospect of weaponizing these assets remains a "nuclear option" fraught with complexity. Because these assets are held by thousands of private pension funds and insurers rather than central governments, a forced divestment would likely trigger mutually assured destruction by crashing asset values and harming European investors. Despite a Danish pension fund's symbolic $100 million bond sale and rhetoric from U.S. Treasury Secretary Scott Besant, large-scale financial decoupling remains an outlandish scenario due to the deep integration of transatlantic capital markets.