European Officials Consider 'Nuclear Option' of Dumping U.S. Treasuries If Trump Cuts Solo Ukraine Deal — WSJ

European leaders are reportedly preparing a dramatic financial retaliation — described as a “nuclear option” — if President Trump finalizes a Ukraine peace deal with Russia without consulting U.S. allies, according to a new report from The Wall Street Journal.

The move under discussion: selling off portions of Europe’s massive U.S. Treasury holdings, a step that could shake global markets and signal a major break in transatlantic unity.

EU Alarmed by Possible Unilateral Trump Deal

European officials fear President Trump may pursue a rapid, unilateral cease-fire arrangement with Moscow that prioritizes American interests over NATO security priorities.

For many in Europe, a U.S.-Russia deal crafted without NATO involvement would represent:

• A breach of alliance trust
• A threat to continental security
• A destabilizing shift in post–Cold War diplomatic norms

A senior EU diplomat reportedly described the current mood as “tense, strategic, and prepared for escalation.”

Why the Treasury Sell-Off Matters

Europe is one of the largest holders of U.S. debt. Even a limited Treasury divestment could:

• Trigger market volatility
• Undercut global confidence in the dollar
• Send a political warning to Washington

While experts say a full liquidation is unlikely, the fact that it is on the table underscores the severity of Europe’s concerns.

High Stakes for Europe’s Security

At issue is more than Ukraine’s borders. European leaders are wary of:

• A sudden policy reversal
• Russia gaining leverage
• Long-term NATO fragmentation
• Increased pressure on Europe to take on new defense burdens

Several capitals — Berlin, Paris, Warsaw, Stockholm — are reportedly engaged in quiet, urgent coordination to present a unified response.

Trump’s Ambiguous Ukraine Promises

President Trump has repeatedly claimed he could “end the war in 24 hours,” but has offered no details on what such a deal would look like. EU governments fear this could mean:

• Forcing Ukraine to concede territory
• Easing pressure on Moscow
• Weakening European deterrence

Without allied input, officials fear a rushed agreement could create lasting geopolitical instability.

Would Europe Really Dump Treasuries?

Economists say Europe would not take such a step lightly. It could:

• Harm Europe’s own economic stability
• Disrupt central banks
• Undermine global bond markets

However, even a symbolic sale — a fraction of holdings — would be enough to signal a major diplomatic rupture. In financial diplomacy, symbolism often hits as hard as action.

What Comes Next?

Expect coordinated EU messaging aimed at:

• Pressuring Washington for allied consultation
• Preparing economic contingency plans
• Strengthening European defense planning
• Exploring diversification of sovereign reserves

The discussion of a Treasury sell-off remains a last resort. But the fact that it is being openly considered marks one of the most dramatic signs yet of a deepening transatlantic divide.

As the war in Ukraine grinds on, Europe is preparing for a new era where trust between allies is no longer guaranteed — and where financial tools may become geopolitical weapons.