Davos, Switzerland - President Donald Trump warned Thursday of major reprisals if European countries dumped key holdings of US Treasury bonds to pressure Washington, as temperatures fluctuated over the future of Greenland.

"If that would happen, there would be a big retaliation on our part, and we have all the cards," Trump said on Fox Business Network's Mornings with Maria.

But he acknowledged that European countries had notable holdings of US Treasury securities.

Trump's remarks came after tensions flared over the fate of the autonomous Danish territory of Greenland – which the US leader covets.

Donald Trump NATO chief Mark Rutte tells Trump that the alliance would come to US aid

The American president has repeatedly said that the US, the key force in NATO, deserves Greenland as it would be forced to defend the island against Russia or China. Neither of those countries holds any claim to the territory.

More recently, Trump's threats to impose tariffs on European countries for not going along with his demand to get Greenland rattled global markets.

But at the World Economic Forum in Davos, Switzerland, Trump on Wednesday backed down on threats to seize Greenland by force from ally Denmark, and lifted the threat of sanctions against European nations.

For now, some observers believe that Europe has economic leverage in the situation, as European NATO countries hold more than $2 trillion of US Treasuries.

If Canada were included, the figure rises to around $3 trillion, according to US government data.

On Wednesday, Swedish pension fund Alecta said it sold the bulk of its US Treasury bonds over the past year, citing what it called the unpredictability of the current administration and growing US debt.

Donald Trump Denmark and Greenland issue warning to NATO chief after Trump "deal" announcement

This made it the second large Nordic fund to make such a decision public, with Danish fund Akademiker Pension announcing Tuesday that it was selling its US Treasuries.

But the Danish fund said its decision was unrelated to the situation over Greenland, linking it instead to poor US government finances.

US Treasury Secretary Scott Bessent this week rejected the idea that Europeans were targeting US debt in retaliation for Washington's designs on Greenland.