European states are considering adopting the “nuclear option” of sinking the US economy, if Donald Trump sells out Ukraine and endangers security on the continent. Talks between US and Ukrainian officials continued on Sunday in Miami, as both sides attempt to thrash out a peace deal.
The US Secretary of State Marco Rubio and Trump’s Russia envoy Steve Witkoff attended the meeting, along with the US President’s son-in-law Jared Kushner. Following the “fragile” talks, the US President told reporters on board Air Force One that there was “a good chance we can make a deal”. However, European leaders remain suspicious that Trump is rushing towards a geopolitical deal with Vladimir Putin, while paying little heed to the security concerns of NATO allies.
The Wall Street Journal reports a European intelligence service has circulated internal assessments about “commercial and economic plans” the Trump team has been exploring with Russia behind closed doors.
This has reportedly fuelled fears among European politicians that the White House is preparing to sacrifice the continent’s security in exchange for its own economic gain.
Sources told the WSJ that European leaders are considering adopting extreme countermeasures in retaliation, designed to unleash economic chaos in the US.
The alleged plan involves dumping trillions in US government debt owned by European states.
A rapid sell off would likely cause a crash in the value of the US dollar, create a liquidity criss across the banking system and cause a huge spike in borrowing costs. It would also lock the American financial sector into a paralysis more severe than the 2008 crisis.
A leading European economist told the WSJ described the plan as a potential financial whiplash that could hit the US harder than any external shock in modern history.
The political consequences would likely be disastrous for Trump and the Republicans as the midterm elections approach next year.
The EU and the UK are among the largest holders of US Treasury securities (US debt), which gives them significant potential economic leverage.
As of December 2024, the United Kingdom holds an estimated $722.7 billion in US debt.
The European Union member countries collectively hold an estimated $1.62 trillion.
Combined, this is approximately $2.34 trillion, making the EU/UK bloc one of the single largest foreign holders of US debt.