In a move that has sent shockwaves through global markets, US Treasury Secretary Scott Bement has called on European countries to refrain from retaliating against President Trump’s proposed tariffs on Greenland. Speaking at the World Economic Forum in Davos, Bement warned that escalating the trade dispute would be unwise, citing the damaging tit-for-tat tariff war between the US and China last year.
Bement’s comments come after Trump threatened a 25% tariff on a range of European goods in his pursuit of the autonomous Danish territory. As stock markets tumbled amid the political uncertainty, the Treasury Secretary urged countries and companies to “pause and let things play out,” drawing parallels to the “hysteria” that followed Trump’s previous “liberation day” tariff announcement in April 2026.
“What I am urging everyone here to do is sit back, take a deep breath, and let things play out,” Bement said. “The worst thing countries can do is escalate against the United States.” He insisted that the Greenland situation is “very different” from other trade deals, and called on European nations to “stick with their trade deals.”
Bement also dismissed concerns that European countries could retaliate by selling their holdings of US debt, labelling this a “false narrative” that “defies logic.” With the US national debt exceeding $38 trillion and the country running a $1.78 trillion deficit in 2025, a buyers’ strike would likely push up America’s borrowing costs and lower the value of existing debt held by investors worldwide.
The Treasury Secretary’s calls for caution come as the EU’s top diplomats met for crisis talks on Sunday, discussing the revival of a plan to levy tariffs on $93 billion of US goods. This proposal has been suspended since last summer’s trade deal with Trump.
Against this backdrop of heightened tensions, global stock markets and the US dollar tumbled on Tuesday, while gold and silver prices hit record highs. In Asia, Japan’s Nikkei fell by 1.1%, while the main European indices lost around 1%. US markets are expected to follow suit when they open later today.
Kristalina Georgieva, the head of the International Monetary Fund, has also urged world leaders to avoid a new trade war, warning that it would be “very good for the world economy” to maintain the current muted impact of tariffs and avoid a renewed tit-for-tat escalation.
As the standoff over Greenland continues to unfold, Bement’s call for a measured response reflects the delicate balance that policymakers must strike between protecting their national interests and preventing further disruption to the global economy.
