Danish pension operator AkademikerPension reported that it is quitting U.S. Treasurys due to financial issues since Denmark is sparring with President Donald Trump over his threats to take over Greenland.
AkademikerPension’s Investing Chief, Anders Schelde, stated that the move was driven by what it believes to be “poor [U.S.] government finances” amid America’s debt crisis.
However, it is also accompanied by increasing tensions between the U.S. and Denmark following the recent threats by Trump to impose tariffs on European nations, an Arctic region of Denmark, which isn’t sold to the U.S.
Schelde said in a statement to CNBC, “It is not directly related to the ongoing rift between the [U.S.] and Europe, but of course that didn’t make it more difficult to take the decision.”
A spokesperson of the AkademikerPension fund said that the fund has a current standing of approximately $100 million in U.S. Treasurys. The academics-centric fund is to divest that holding by the month-end.
Schelde primarily referred to the soaring debt bill confronting the U.S. after decades of government overspending. The U.S. had a budget deficit of 1.78 trillion in the previous year, which decreased slightly by slightly above 2 percent compared to the 2024 fiscal year due to the wide-ranging and high tariffs enforced by Trump.
Moody’s reduced the sovereign credit rating of the United States to Aa1, or Aaa, in May, and cited the budget deficit and the high cost of borrowing by rolling over debt at high interest rates.
Schelde added, The U.S.′ finances made us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management. Now we have found such a way and we [are] executing on that.”
Denmark has become even more aggressive toward the U.S., with Trump escalating his demands to have Greenland given to the U.S., and he said over the weekend that he would impose tariffs on a dozen European countries starting on February 1, if the U.S. did not take control of Greenland, and those levies might increase to 25 percent on June 1.
Other punitive economic actions have also been reported to be considered by the European leaders through the use of counter-tariffs. Certain investors have feared that European nations might sell their U.S. asset holdings as a response to Trump’s new tariffs.
Greenland Prime Minister Jens-Frederik Nielsen added on Monday that it would “not be pressured” and “stand firm on dialogue, on respect and on international law.”
Therefore, the treasury yields of the U.S. and other countries shot up on Tuesday, an indication that investors were experiencing the build-up of geopolitical turmoil. The U.S dollar and stocks declined, and gold was trading at new all-time highs in a session defined by the “sell America” trade.
Bridgewater Associates founder Ray Dalio said on Tuesday in an interview with CNBC that sovereign funds might begin dumping U.S. investments in case they cease perceiving the U.S. as a reliable trading partner.
Dalio reported to CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland, “On the other side of trade, deficits, and trade wars, there are capital and capital wars. If you take the conflicts, you can’t ignore the possibility of the capital wars. In other words, maybe there’s not the same inclination to buy … U.S. debt and so on.” Thus, the exit of the Treasury of the Danish pension fund was first reported by Reuters.
