Scott Bessent told European countries on Tuesday that they should not respond to American trade tariffs that President Donald Trump announced in the Greenland dispute. Speaking at the World Economic Forum in Davos , the US Treasury Secretary asked countries and businesses to wait and see what happens. Trump had said he would put 25% tariffs on several European countries while he tries to get Greenland, which Denmark currently controls as an autonomous territory. Bessent brought up last year’s tariff fight between America and China as an example of what Europe should avoid. He said countries would be making a mistake if they tried similar moves back at Washington as world markets dropped because of the political tensions. “I would say this is the same kind of hysteria that we heard on 2 April,” Bessent told reporters at the meeting. “There was a panic.” “What I am urging everyone here to do is sit back, take a deep breath, and let things play out,” Bessent said . “The worst thing countries can do is escalate against the United States.” He said Trump’s threats about Greenland are different from other trade deals. He wants all countries to stick with the trade agreements they already made, since those are done and give everyone certainty. Treasury secretary dismisses debt concerns Bessent also said he does not think European countries will sell their American debt because of the Greenland crisis. He called predictions that Europe might stop lending to the US and sell off US treasuries a fake story that does not make sense. He went after the media for paying too much attention to a Deutsche Bank report on this, calling the coverage hysterical. “I think it is a completely false narrative. It defies any logic, and I could not disagree more strongly,” he said. This matters because US national debt is over $38 trillion, and the country had a deficit of $1.78 trillion in 2025. If big investors stopped buying American debt, it would cost more for the US to borrow money and lower the value of the debt that investors already hold. Bessent appeared to be talking about research that George Saravelos from Deutsche Bank put out on Sunday. As reported by Cryptopolitan earlier, Saravelos pointed out that Europe owns Greenland and also owns a lot of American treasury bonds. Saravelos wrote that even with its military and economic strength, America has one big weakness. It needs other countries to help pay its bills through large external deficits. Europe is the biggest lender to the United States. “European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined,” Saravelos wrote. He asked why Europeans would keep doing this when the economic stability between Western partners is being seriously disrupted. Markets see US government debt as risk-free and use it to price other things. Bessent said European governments will keep holding it. EU leaders promise firm response The Treasury Secretary is part of the biggest American group ever sent to Davos. Trump will speak at the meeting on Wednesday. European Commission President Ursula von der Leyen said Trump’s economic threats about Greenland are a mistake that breaks a trade deal made between the partners last year. “The European Union and the United States have agreed to a trade deal last July,” von der Leyen said in her Tuesday speech at the forum. “In politics as in business, a deal is a deal. And when friends shake hands, it must mean something.” She said the bloc’s answer will be firm, united and measured, but she did not say what that answer might look like. Top EU diplomats had emergency talks on Sunday and talked about bringing back plans to put tariffs on £81 billion of American goods. Those tariffs were put on hold after last summer’s trade deal with Trump. France already wants the EU to use its anti-coercion instrument, which can go after foreign investment and financial markets as well as trade. EU leaders will meet on Thursday in Brussels for an emergency session to look at possible ways to respond. Neil Shearing from Capital Economics wrote in a Sunday note that a 10% tariff going up to 25% would cut GDP in affected NATO countries by 0.1 to 0.3 percentage points and add 0.1 to 0.2 points to American inflation. “The political ramifications would be far greater than the economic ones,” Shearing said. He warned that any American move to take Greenland by force or pressure could do permanent damage to NATO. European officials have said Greenland’s independence is a line they will not cross. The Trump administration is not backing down either. Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free .
