economy
January 24, 2026
Here’s how Europe can file for divorce from Donald Trump
Amid the tumult of the WEF in Davos this week, some investors are leading the way by ditching US government bonds
TL;DR
- Europe is advised to pursue a financial "divorce" from the US due to concerns about the international order and potential future US belligerence.
- This separation could involve reducing or selling US Treasury bond holdings, similar to actions already taken by China and Japan.
- A Danish pension fund's decision to sell US government bonds is highlighted as a potential model for European institutions.
- European regulators could facilitate the sale of US bond holdings by pension funds and reconsider the verdicts of credit rating agencies.
- Establishing a permanent market for bonds denominated in euros could create a rival to US Treasury bonds and offer an alternative safe haven.
- Such a European bond market could attract global funds seeking safe havens and potentially involve financial centers like London.
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