Europe Holds $10.4 Trillion in the United States and Could Soon Divest

Donald Trump likes to present himself as the man who made American finance “stronger than ever.” He speaks loudly, often threatens, and always promises to “make those who challenge his leadership bend.” But this time, his brash tone may backfire. Because on the other side, Europe no longer trembles: it holds thousands of billions of dollars invested in the United States and, if needed, it can unleash its famous “economic bazooka.”

Europe’s Hidden Weapon: $10.4 Trillion That Shake Wall Street

Europe, armed with a secret weapon, has for years been the main driver of American markets. Its pension funds, insurance companies, and asset managers hold nearly $10.4 trillion in American stocks, almost half of all foreign capital on Wall Street.

It is a colossal figure, yet unknown. Behind the American stock market records hides a reality: without European money, American indices would never have reached these heights.

But times are changing. Since Trump threatened to impose tariffs on eight European nations, a wind of distrust is blowing. At Amundi, the largest European asset manager, the signal is clear. Its Chief Investment Officer, Vincent Mortier, confides:

We see more and more clients wanting to diversify away from the United States. We noticed that this trend started in April 2025, but it somewhat accelerated this week.

In short, investors who have nurtured American prosperity could become its Achilles’ heel. The figures are telling: Europe holds 49% of all American stocks held by foreigners, and half come precisely from the countries targeted by Trump.

It is a double-edged dependency: Wall Street shines, but thanks to the money of a continent regularly insulted by the President of the United States.

Trump, Finance, and the Dangerous Game of Threats

Markets do not like uncertainty or oversized egos. Yet, Trump combines both. His recent belligerent tone towards Europe was enough to make markets fold: the S&P 500 lost 2.1% after his latest announcements.

Certainly, nothing catastrophic in the short term, but tension signals are multiplying: capital flows stabilize, withdrawal requests increase, and managers openly talk about “reallocation.”

Europe, in addition to its stocks, holds nearly $2 trillion in U.S. Treasury bonds. Even a marginal reduction would raise the cost of financing U.S. debt.

Economist Richard Portes (London Business School) recalls that “U.S. debt is today their greatest weakness.” The danger is therefore clear: Trump is playing with the fire of a dependency he no longer controls.

While the American president promises a doubling of the markets, investors are looking for an exit. The Danish fund AkademikerPension has already started selling its Treasuries, while Greenland’s SISA Pension contemplates reducing its exposure by 50% on American assets.

Recent performances reinforce the trend: in 2025, the South Korean stock market (Kospi) jumped 80%, the European Stoxx 600 by 32%, compared to only 16% for the S&P 500.

Result: global finance is quietly shifting toward a new balance, less centered on New York, more diversified.

When Europe Rediscovers Its Weight on the Global Financial Stage

What is happening today goes beyond a simple diplomatic showdown. For the first time in a long time, the European Union discovers it can hit hard without firing a shot. The Greenland episode, where Trump had to back down facing the European threat of an economic response of $93 billion, is proof.

According to The Guardian, it is not political speeches but the markets themselves that forced the White House to calm down.

In Brussels, an idea is emerging: European money is a weapon of massive deterrence. The EU is working on a new tool, the Anti-Coercion Instrument (ACI), capable of economically retaliating against any American trade attack.

Certainly, Europe does not want to sabotage Wall Street, but it now knows that finance can be political.

As Lars Christensen highlights, analyst at Paice:

It is not about Europe standing against the United States. It is a matter of caution in our investments — risk reduction. 

Analysts at Tikehau Capital and Julius Baer even talk about a “new investment cycle,” focused on Asia and Europe. 

America has long dominated global finance, but its political arrogance could very well cost it that hegemony. Finance, however, has no flag — only calculations.

Figures Summarizing the Financial Battle

• Europe holds $10.4 trillion in American stocks, representing 49% of foreign capital on Wall Street;
• In 2025, the Stoxx 600 jumped 32%, compared to 16% for the S&P 500;
• European investors own $2 trillion in U.S. sovereign debt;
• The S&P 500 dropped 2.1% after Trump’s tariff threats;
• The Ethereum price currently trades at $2,931.

When Europe promises to unleash its bazooka, global markets hold their breath. Last time, bitcoin wavered and gold soared. This time, it might be Wall Street that trembles if the Old Continent decides to divest its billions. Trump is playing a dangerous game, and finance does not forgive.