The Main Point of the U.S.: $10.4 Trillion USD in European Assets and Trump's Tariff War

A new turning point is emerging amidst global trade tensions. Europe currently holds the key leverage of the U.S. economy through $10.4 trillion in assets in this country, and the continent’s decisions in the coming months will reshape the global financial landscape. While Trump continues to use tariff tactics to exert pressure, Europe is considering retaliatory measures that could shake up the markets.

Europe Holds the Trump Card in Financial Power

Europe’s economic strength doesn’t lie in its military or proprietary technology but in its ability to control global capital flows. With $10.4 trillion in assets in the U.S., including $2 trillion in Treasury bonds, Europe could create a ripple effect in the Western economy if it decides to release these assets.

The Achilles’ heel of the U.S. is its dependence on foreign currency to finance its debt. If major creditors begin to reduce their holdings of Treasury bonds, the U.S. government’s borrowing costs could skyrocket, putting pressure on the entire economy. This is the main leverage Europe can exploit in the ongoing trade war.

Major Investment Funds Are Restructuring Their Portfolios

Signs of this are already emerging. Large funds like Amundi and Denmark’s AkademikerPension are starting to restructure their investment portfolios. They are reducing their U.S. asset holdings to shift toward Europe and Asia, based on clear economic rationale.

By 2025, performance index reports paint an interesting picture: while the U.S. S&P 500 rose 20.2%, Europe’s Stoxx 600 increased 22.8%, and South Korea’s Kospi grew 24.5%. These figures are not coincidental—they reflect a gradual shift of assets from West to East, from the U.S. to other economies.

Real Threat to the Global Market

Markets dislike instability, and this is the only thing that could cause fear. Just recent sharp comments caused the S&P 500 to drop 2.1%, demonstrating investors’ sensitivity to geopolitical risks.

If Europe truly releases its U.S. asset reserves, the consequences could surpass this 2.1% decline. Stocks, especially U.S. equities, would be directly impacted. The U.S. dollar would also weaken as international organizations release massive amounts of foreign currency.

Safe-haven assets like gold (currently at $4,850 USD) and Bitcoin (recorded at $71,570 USD on February 5, 2026) could become refuges for investors seeking stability. History shows that whenever economic or geopolitical instability occurs, non-traditional assets tend to become preferred safe havens.

The System’s Achilles’ Heel: Difficult Choices Ahead

This trade war isn’t just about big numbers; it’s about strategic decisions. Europe is weighing whether to use its main leverage—this is a historic decision. On one hand, retaliatory actions could cause global damage; on the other, inaction might be seen as a defeat.

Investors need to closely monitor discussions from Brussels and Washington. Every new statement from leaders, every hurried move by major funds, could be an early signal of a larger shift in the global markets.

Note: This article is for informational and analytical purposes only. It is not investment advice. Please conduct thorough research and consult with professionals before making any investment decisions.