The Indicator from Planet Money

Episode Summary: "Can Europe sell America?"

Date: January 27, 2026
Hosts: Darian Woods, Waylon Wong
Guest: Robin Wigglesworth, Editor of FT Alphaville (Financial Times)

Episode Overview

This episode explores the economic tensions between Europe and the United States, specifically whether Europe could use its financial muscle to "sell America" as leverage in response to strained political relations. The hosts discuss recent events, including symbolic divestments and the theoretical “anti coercion mechanism” that the EU could deploy against the US. Through an in-depth conversation with finance journalist Robin Wigglesworth, the show analyzes the plausibility and implications of Europe using its economic power to affect the US economy.

Key Discussion Points & Insights

1. Recent Political Tensions and Shifts in Tone

• The show opens by referencing the decrease in tension between Europe and the US, noting that while some friction (like Trump and Greenland) has subsided, an "uneasy simmer" remains ([00:42]).
• Macron’s recent public statements at Davos are highlighted, particularly his advocacy for Europe’s use of economic tools to respond to “bullying” ([01:10]).

2. The "Anti Coercion Mechanism"—Europe's Economic Bazooka

• Definition: A legal tool allowing the EU to strike back against economic or political coercion by other states, potentially through means far beyond tariffs ([01:27], [04:31]).
• Potential Measures: Banning individual companies, severely restricting access for US giants like Amazon or X (formerly Twitter).
• Limitations: Considered a “bazooka” partly for show; reticence remains about using it due to the high probability of self-inflicted harm and the risk of US retaliation ([05:00]-[05:04]).
  • Memorable quote:

    “The bazooka is only useful if you actually fire. And that’s the question with Europe—whether it has the willingness to really sort of go nuts with the anti coercive measures.”
    — Robin Wigglesworth ([04:31])

3. The Specter of Financial Retaliation: Selling US Assets

• European institutions hold over $3 trillion in US Treasury bonds, making them America’s largest foreign lender ([06:02]).

• Compared with China’s $700 billion, Europe’s financial footprint in US debt markets is much larger than commonly assumed.

  • Discussion:
    • Europe could theoretically weaponize these holdings by selling US Treasuries—but this would likely backfire:
      • Selling would depress asset values, harming European investors as well ([06:52], [08:02]).
      • The assets are mostly held by private entities, not governments, making coordinated action difficult.

        “You’d be cutting off your nose to spite your face. It would trash the value of these American assets and hurt, of course, European investors in the process.”
        — Robin Wigglesworth ([08:02])

• Scenarios:

  1. Market-Led Divestment—European investors gradually grow more wary and slow their buying ([07:44]).
  2. Dramatic Government Mandate—Forcible sales, which Robin calls the “nuclear weapon,” seen as extremely unlikely due to complexity and mutual damage ([08:02]).
  • Summary quote:

    “Mutually assured destruction in Cold War terminology.”
    — Darian Woods ([09:01]) “Basically, yes.”
    — Robin Wigglesworth ([09:04])

4. Skepticism About Extreme Scenarios and Media Dynamics

• Robin finds the prospect of a major European divestment unlikely, in agreement with US Treasury Secretary Scott Besant, despite being labeled by Besant as “fake news.” ([09:23])

  • Notable moment:

    “It was a little bit weird for him to call us the fake news media when in this case we actually happen to agree with him.”
    — Robin Wigglesworth ([09:38])

• The idea originated in a Deutsche Bank analyst note, which Robin’s article critiqued as “outlandish” ([09:55]).

5. Tone and Personal Touches

• The episode includes playful banter about Macron’s sunglasses ([01:00]), the color of the Financial Times (salmon bisque pink, [03:51]), and Robin’s British-sounding Norwegian surname ([10:11]).
  • Fun exchange:

    “So it’s more British than Britain.”
    — Darian Woods ([10:28])
    “Exactly.”
    — Robin Wigglesworth ([10:30])

Timestamps for Important Segments

• [00:42] — Setting the stage: Europe’s unease post-tensions with US
• [01:10] — Macron at Davos discusses Europe’s tools for economic self-defense
• [01:27]/[04:31] — Introduction and exploration of the anti coercion mechanism
• [06:02] — Europe’s holdings of US Treasuries are revealed
• [06:52]-[08:02] — Detailed analysis of what financial retaliation could look like, and its complications
• [09:23]-[09:49] — Robin Wigglesworth reacts to being called “fake news” by US Treasury Secretary
• [10:11]-[10:31] — Lighthearted discussion of Robin’s last name

Notable Quotes

• “Europe has very strong tools now and we have to use them when we are not respected and when the rule of the game are not respected.”
  — Emmanuel Macron (paraphrased by Scott Besant), ([01:10])

• “It’s essentially measures that can go beyond just trade tariffs...”
  — Robin Wigglesworth on the anti coercion mechanism ([04:31])

• “Around $3 trillion or so is in the treasury market. So that probably makes Europe the single biggest holder of treasuries in the world outside of the US, of course.”
  — Robin Wigglesworth ([06:02])

• “You’d be cutting off your nose to spite your face...”
  — Robin Wigglesworth ([08:02])

• “Mutually assured destruction in Cold War terminology.”
  — Darian Woods ([09:01])

• “It was a little bit weird for him to call us the fake news media when in this case we actually happen to agree with him.”
  — Robin Wigglesworth ([09:38])

Summary Takeaway

While Europe theoretically has powerful financial tools—like the anti coercion mechanism and its vast holdings of US assets—they are unlikely to be deployed in a way that would seriously hurt the US economy, due to the high risk of mutual economic harm. The episode settles on the conclusion that, despite the dramatic headlines, the probability of Europe “selling America” as a weapon is quite low.