GLOBAL MARKETS REEL AS TRUMP’S GREENLAND-LINKED TARIFFS IGNITE NEW WAVE OF UNCERTAINTY

London, 20 January 2026

Global financial markets entered a fresh period of volatility on Monday after U.S. President Donald Trump announced sweeping new tariffs on eight European nations, a move analysts say could reopen a full‑scale transatlantic trade war. The announcement—tied to Trump’s renewed push to pressure Europe over the purchase of Greenland—triggered immediate sell‑offs across equities, a surge in safe‑haven assets, and warnings from economists about potential damage to global growth.

The tariffs, set at 10% on all goods imported from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, will take effect on 1 February, with Trump threatening to raise them to 25% by June if Europe does not agree to a deal over Greenland.

📉 Market Reaction: Risk Assets Slide, Safe Havens Surge

European markets were the first to absorb the shock. The Stoxx 600 fell more than 1%, with automakers, luxury brands, and retail companies—sectors heavily exposed to U.S. demand—leading the decline.
U.S. equity futures mirrored the downturn, with S&P 500 and Nasdaq 100 futures slipping over 1% during the U.S. market holiday.

Investors rapidly shifted into defensive positions:

Gold prices surged, reaching intraday highs near $4,698 per ounce.
Silver jumped over 4%, briefly crossing $94 per ounce.
European defence stocks, including Saab, Rheinmetall, and Dassault Aviation, gained more than 3% as geopolitical tensions intensified.

Crypto markets were hit even harder. Bitcoin saw a sharp sell‑off, with more than $4 billion in BTC offloaded within an hour, pushing prices below the key $93,000 support level.

🇪🇺 Europe Responds: Retaliation on the Table

European leaders condemned the move, warning that the tariffs risk destabilizing transatlantic relations and undermining the fragile trade truce reached last year.

EU Commission President Ursula von der Leyen and Council President António Costa issued a joint statement cautioning that the tariffs could trigger a “dangerous downward spiral” in trade relations.

Key developments include:

France has called for activating the EU’s Anti‑Coercion Instrument, a powerful mechanism allowing retaliatory tariffs and investment restrictions.
The EU’s previously drafted €93 billion in retaliatory tariffs—suspended during negotiations—could automatically come into force in early February unless the bloc intervenes.
Economists at ING warn the tariffs could shave 0.5 percentage points off Eurozone GDP growth, with further losses if the 25% rate is imposed.

🇺🇸 The U.S. Position: Tariffs as Leverage

Trump defended the move on social media, arguing that European nations have “benefited for centuries” from U.S. restraint on tariffs and must now “give back” to preserve global stability.

The President linked the tariffs directly to his demand that Denmark and other European states agree to a U.S. purchase of Greenland—an issue that has resurfaced repeatedly during his administration.

Analysts say the strategy reflects a broader pattern of using trade policy as geopolitical leverage, a trend that has repeatedly unsettled markets since 2025.

📊 Economic Outlook: A New Phase of Global Uncertainty

Economists warn that the tariff shock could have far‑reaching consequences:

Eurozone growth forecasts may be revised downward by 20–50 basis points if tariffs escalate.
Supply chains—already strained by previous trade disruptions—face renewed pressure, particularly in autos, aerospace, and luxury goods.
Investor sentiment may remain fragile as markets await signals from EU consultations and potential U.S. clarifications on tariff implementation.

J.P. Morgan analysts note that the uncertainty comes at a time when the U.S. Supreme Court is still weighing the legality of earlier Trump‑era tariffs, adding another layer of unpredictability to global trade policy.