US Treasury Secretary Scott Bessent on Tuesday rejected the idea that European governments could aggressively sell American debt to counter Washington's threats over Greenland, saying such a move would "defy logic".But asked by reporters at the Davos World Economic Forum whether the US was preparing for such a scenario, Bessent said that it "defies any logic".
Trade based in USD, creates demand for the currency. So as long as you trade in it, selling off bonds will only create a one time inflation event. However if you stop trading in it, demand for the USD goes down and prevents the Fed from doing QE. It actually is even worse for the US. The main reason to hold treauries is to have a near cash equivalent, which has at least some return. That is something you need, when you trade in dollars. In other words less trade in dollars means a de facto sell off in US treausries.
You didn’t understand my comment it seems.
You can’t just stop trading in US dollars, at best you can very slowly look for other suppliers for vital commodities that you currently have to buy in US dollars. That is a decade long process and will not do anything to deter the US from doing what it wants right now.
Selling off bonds on the other hand has a direct effect on the finances of the US government which is constantly issuing new bonds to finance its deficit. This effect is somewhat limited by the fact that they can also do quantitative easing (“printing money”), but that usually has a direct effect on the value of the dollar and is much more likely to make others to reconsider their trade in US Dollars than a few European states slowly diversifying their supply chain over the course of a decade or so.