In April 2025, the “Sell America’ trade gained a great deal of traction after Trump’s “Liberation Day tariffs”. The global markets were shook and had some of the worst trading sessions since the pandemic.
Donald Trump was once again at the center of geopolitical tensions in 2026. His push to “acquire Greenland” has forced his allies to come up with solutions to problems that they never expected.
The problem is that global markets are often interconnected. Once a country or region begins to lose faith in the assets of another country, a chain-reaction is expected.
On the 20th January, stocks, Treasuries and the dollar all fell at the same time.
Investors began to reassess the predictability of the US as the anchor for the global system, not because growth had collapsed or earnings had disappointed.
This moment is different because it was not the selloff that triggered it, but rather what triggered it.
Why Greenland changed its tone
Markets are accustomed to trade tensions. Investors know that many tariff threats result in partial rollbacks or lengthy negotiations.
Allies have responded more strongly to Donald Trump’s efforts to assert control over Greenland.
Greenland is a major trading partner. Greenland is at the intersection of NATO obligations, European sovereignty and Arctic security.
When the US threatened to impose tariffs on eight European nations that opposed the move the markets stopped treating it as a tactic for bargaining.
It was a question of just how far the pressure could go on allies and if there was a clear exit.
This perception was evident when the markets opened Tuesday, January 20th. The S&P 500 lost more than 2% of its value in a single trading session, wiping away all gains for the year.
Even as stocks fell, yields on long-term Treasury bonds jumped. The dollar fell against the euro and sterling as well as the Swiss franc.
These moves are rarely seen together, unless investors question the sovereign risk rather than the cycle.
The rhetoric coming from Europe only reinforced this feeling of unease.
Leaders in France and Canada openly questioned whether the rules-based system would survive. These comments were less important for their politics than for what they said to capital allocators.
Once thought to be stable alliances, they are now part of a risk calculation.
When bonds stop cushioning equity
The failure of bonds to perform their usual function is one reason why the move has upset investors.
In most equity selloffs Treasuries rise as investors seek safety. This time they were also affected by the sell-off.
The timing was also important, as the US bond market went into chaos after the market reopened on Monday following a long holiday weekend.
After Prime Minister Takaichi announced snap elections and pledged a looser fiscal policy, yields on Japanese government bonds of 30 and 40 years reached record levels.
It was the most disorderly session of trading in years.
Japan is not just a bond market. It is at the heart of global funding and carry-trades. When yields in one place jump, leverage is unwinding elsewhere.
The pressure on US duration came just as geopolitical risks spiked, pushing Treasury rates higher instead of lower.
The result was unsettling for equity investors. The rising yields tighten the financial conditions while also reducing valuations.
It also acts as a shock-absorber, sending a message that the bond markets are no longer confident.
This dynamic was what forced a rethinking in April 2025 when tariffs sparked the first brief “Sell America’ panic. It resurfaced this month.
Gold tells a different tale
Gold is the most obvious source of information. Gold prices pushed to new records, exceeding $4,850 per ounce. Silver and platinum were next.
This move has nothing to do with inflation or recession fears in the near future.
Gold has responded to two things. The first is the stress in sovereign debt markets. This starts with Japan and extends to the US, Europe, and even to other countries. According to IMF projections, debt-to GDP ratios will continue to rise.
Second, there is concern over political influence on institutions.
Investors are closely watching the legal battles over independence of the Federal Reserve and the threats to use tariffs in geopolitical warfare.
In this context, the appeal of gold is simple. It has no policy risk and no issuer.
Central banks have reinforced this message. The National Bank of Poland has approved plans to purchase another 150 tons of Gold, while other central banks in emerging markets resumed reserve purchases at the end of last year.
When official buyers step into the market at record prices, this indicates long-term diversification and not short-term fear.
Why this isn’t a repeat of the year 2025
It’s tempting to see the latest selloff in the same way as April last year when “Sell America,” dominated headlines for several weeks before fading.
The data showed that foreign investors returned quickly. By mid-year, Treasury holdings had reached record levels.
The foreign allocation to US equities has risen above 30%, which is far above the historical average. Earnings were stable, and US technology stocks outperformed global peers.
These fundamentals haven’t disappeared. The US economy is resilient, corporate profits are still high, and the dollar is the world’s main reserve currency.
What has changed is the expectation of repetition.
Investors assumed that Trump would retreat from the markets once they pushed back in April.
Investors are now less convinced that there is a Greenland off-ramp, so the issue no longer is marginal tariffs but the use markets as geopolitical points of pressure.
In 2025, the first sign of stress was in the equities. Then, as yields stabilized, and the dollar gained support the stress faded. This time the sequence is reversed. The dollar fell early and widely.
The dollar is often the last line to defend US assets when investors lose confidence. A simultaneous decline in Treasuries and the currency, as well as in equities points to a repricing rather than growth.
Global capital is still skewed towards the US for the time being, but the US valuations are higher than those of its peers.
The higher yields continue attracting buyers. There is no other market with the same liquidity or depth.
The idea that political risks in the US are unpriceable is no longer valid.
The recent moves have a quiet lesson. It’s not that America is being sold, but it is being questioned by investors in ways they had grown accustomed to ignoring.
This post, The ‘Sell America Trade is Back’ but why it’s Different This Time may be modified as new developments unfold.
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