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By Hugh Cameron
Reporter
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President Donald Trump’s latest threats to acquire Greenland and warnings of escalating tariffs for any nation opposing this plan appear to have spooked markets and sparked another round of “Sell America” trades, with investors shedding their U.S.-linked bonds and equities.
Tuesday’s selloff of American stocks and Treasuries sent yields sharply higher as all three major U.S. indexes recorded their worst session since October, according to CNBC. These moves pushed the U.S. dollar to a two-week low, per the Wall Street Journal, and hastened the ongoing increase in the price of safe-haven assets like gold and silver.
Why It Matters
Talk of “Sell America” trades—investors reducing their dollar exposure amid policy‑related uncertainty—surfaced in April of last year, after President Trump’s “Liberation Day” tariff announcements sent markets into a frenzy and aroused fears of an imminent global trade war. Beyond the most recent tariff announcements, however, some have interpreted renewed selloff concerns as indicative of more long-running anxieties about the stability of the U.S. economy.
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What To Know
On Saturday, Trump said he would be increasing tariffs on countries that opposed the U.S. acquiring Greenland, days after several European nations—including Denmark—issued a joint statement rejecting the plan. In his Truth Social post, Trump said these tariffs would begin at 10 percent on February 1, rising to 25 percent on June 1, and this week told NBC News he was “100 percent” committed to following through on the threat.
When American markets reopened on Tuesday—having been shut in observance of Martin Luther King Jr. Day—the Dow Jones slid 1.8 percent, the S&P 500 fell 2.1 percent and the Nasdaq shed 2.4 percent over the course of the day’s trades.
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IG market analyst Tony Sycamore told Reuters investors were disposing of their U.S.-linked assets due to "fears of prolonged uncertainty, strained alliances, a loss of confidence in U.S. leadership, potential retaliation and an acceleration of de-dollarisation trends.”
Separately, on Tuesday, a Danish pension fund holding around $100 million in U.S. Treasuries said it would be divesting from this position entirely. AkademikerPension confirmed the move to CBS News and said this was “rooted in the poor U.S. government finances." While not directly prompted by the Greenland developments, the fund added that these “didn't make it more difficult to take the decision.”
But the administration has downplayed fears over any “Sell America” trade taking hold as a result of Trump’s angling toward Greenland. Speaking to reporters at the WEF on Wednesday, and seemingly referencing the Danish pension fund, Treasury Secretary Scott Bessent said: “Denmark’s investment in U.S. Treasury bonds, like Denmark itself, is irrelevant.”
What People Are Saying
White House Deputy Press Secretary Anna Kelly told Newsweek on Wednesday: “President Trump was not elected to preserve the status quo – he is a visionary leader who is always generating creative ideas to bolster U.S. national security. Many of this President’s predecessors recognized the strategic logic of acquiring Greenland, but only President Trump has had the courage to pursue this seriously. As the President said, NATO becomes far more formidable and effective with Greenland in the hands of the United States, and Greenlanders would be better served if protected by the United States from modern threats in the Arctic region.”
Hedge fund manager Ray Dalio, founder of Bridgewater Associates, told CNBC on Tuesday: “On the other side of trade deficits and trade wars, there are capital and capital wars.
“If you take the conflicts, you can’t ignore the possibility of the capital wars,” he added. “In other words, maybe there’s not the same inclination to buy at U.S. debt and so on.”
What Happens Next
Speaking at the WEF on Wednesday, Trump said that the U.S. “won’t use force” to occupy Greenland, and said he is seeking “immediate negotiations” with the relevant powers to discuss acquiring the territory.
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