Europe’s ability to weaponize its US asset holdings is constrained less by size than by control, because trillions of US assets held within the EU skews heavily toward privately owned securities that governments cannot easily order to be sold.
US Treasury data puts US assets held within the EU at over $10 trillion, with a composition dominated by $6 trillion in US equities, plus roughly $2 trillion in corporate and other bonds, $2 trillion in US Treasuries, and $225 billion in US agency bonds.
The “sell” lever is most visible in Treasuries, where European countries hold $3.64 trillion of US Treasury securities, described as nearly 40% of foreign-held US Treasuries.
The largest individual European holders shown are the UK ($888 billion), Belgium ($481 billion), Luxembourg ($426 billion), France ($376 billion), Ireland ($340 billion), Switzerland ($300 billion), Norway ($219 billion), and Germany ($110 billion).
That Treasury footprint sits inside a broader foreign holder base led by Asia at $3.79 trillion and the Americas at $1.69 trillion. Asia’s largest holders include Japan ($1.20 trillion) and China ($683 billion), followed by Taiwan ($312 billion), Singapore ($272 billion), Hong Kong ($256 billion), India ($186 billion), Saudi Arabia ($149 billion), South Korea ($145 billion), Israel ($108 billion), and the UAE ($103 billion). In the Americas, Canada ($472 billion) and the Cayman Islands ($427 billion) are the largest, with Brazil ($168 billion) trailing.
The debate is being pulled into markets because strategists are explicitly framing “weaponization of capital” as a tail risk as Trump’s expansionist posture and renewed tariff conflict intersect with Greenland-related tensions, and because the US dependence on foreign capital is being described as a structural vulnerability via large external deficits.
Public vs. private
Still, the proposed mechanism runs into immediate plumbing problems: the bulk of US securities domiciled in Europe are held by a wide universe of private investors, and some “Europe-domiciled” holdings may ultimately belong to investors outside the region, reducing the EU’s practical ability to compel sales without heavy-handed policy tools.
Public-sector holdings exist, but they are not a clean trigger either. Norway’s $2.1 trillion sovereign wealth fund is singled out as the largest public-sector actor, yet even the base-case view from strategists is that public investors may at most slow accumulation or begin modest selling only after a material escalation, because sacrificing returns for politics is an expensive form of leverage.
Europe’s more concrete response set is currently trade-focused: the EU is weighing halting approval of its July trade deal with the US, and leaders are discussing tariffs on €93 billion ($108 billion) of US goods, with calls from Germany’s finance leadership to prepare the strongest trade countermeasure.
Market price action described so far looks like a “Sell America” flare-up rather than a capital-war regime shift: US equity futures, European stocks, and the dollar weaken, while gold, the Swiss franc, and the euro benefit, echoing a milder version of reactions seen after Trump’s April tariff shock last year.
Positioning and performance history also complicate the threat. Some investors may already have trimmed US exposure after last year’s “Liberation Day” tariffs, yet the dollar is still described as suffering from that episode, while US Treasuries still posted their best year since 2020 and US stocks continued making fresh records.
Information for this story was found via Bloomberg and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
