Published by Global Banking & Finance Review®
Posted on January 18, 2026
4 min readLast updated: January 19, 2026
Add as preferred source on GoogleTrump's tariff threats on Europe over Greenland acquisition could impact markets and geopolitical relations.
LONDON, Jan 18 (Reuters) - U.S. President Donald Trump has promised to implement further tariffs on imports of goods from some European countries until the U.S. is allowed to acquire Greenland, a move that could send a jolt through financial markets when they reopen on Monday.
In a post on Truth Social, Trump said additional 10% import tariffs would take effect on February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by Trump.
Major EU states on Sunday decried the tariff threats against European allies as blackmail, as France proposed responding with a range of previously untested economic countermeasures.
GEORGE SARAVELOS, GLOBAL HEAD OF FX RESEARCH, DEUTSCHE BANK, LONDON:
"We are not so sure the impact on the euro will be as negative as is commonly assumed.
"European countries own $8 trillion of U.S. bonds and equities, almost twice as much as the rest of the world combined.
"With dollar exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing."
HOLGER SCHMIEDING, CHIEF ECONOMIST, BERENBERG, LONDON:
"For Europe, this is a bad geopolitical headache and a moderately significant economic problem. But it could also backfire for Trump, who faces resistance from senior Republicans in the U.S.
"Logic still points to an outcome that respects Greenland's right to self-determination, strengthens security in the Arctic for NATO as a whole, and largely avoids economic damage for Europe and the U.S."
TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:
"Markets at this point are expected to reopen this week in 'risk-off' mode.
"This latest flashpoint has heightened concerns over a potential unravelling of NATO alliances and the disruption of last year’s trade agreements with several European nations, driving risk-off sentiment in stocks and boosting safe-haven demand for gold and silver."
CARSTEN NICKEL, DEPUTY DIRECTOR OF RESEARCH, TENEO, LONDON:
"The most likely way forward is a return to the trade war that was put on hold in high-level U.S. agreements with the UK and the EU in summer.
"The immediate takeaway is that deals with the U.S. administration hardly provide certainty over the longer term. This risk was already evident from the fact that the summer agreements left many technical questions unanswered.
"The key question to watch is whether the EU will try to keep the confrontation confined to such a more “classic” trade war, or whether calls for a harsher line prevail."
NEIL SHEARING, GROUP CHIEF ECONOMIST, CAPITAL ECONOMICS, LONDON:
"At face value, the tariffs would shave a few tenths of a percentage point off GDP in the affected economies while adding a similar amount to U.S. inflation.
"The political and geopolitical consequences would be much greater.
"Any attempt by the U.S. to seize Greenland by force or coerce Denmark into ceding the territory would drive a wedge through transatlantic relations and inflict potentially irreparable damage on NATO.
"While European governments have shown a willingness to compromise with the U.S. on issues such as trade, defence spending and Ukraine, sovereignty over Greenland is unlikely to be negotiable."
KALLUM PICKERING, CHIEF ECONOMIST, PEEL HUNT, LONDON:
"While a lot will depend on what information we get from either the U.S. or Europe before markets open on Monday, given what we know so far, the initial moves are likely to be decidedly risk-off. Gold and silver are likely to rally while equities come under pressure.
"Given Trump’s recent attacks on the U.S. Federal Reserve, this serious escalation with Europe could add even more downward pressure on the dollar if it adds to worries that U.S. policy credibility is becoming critically impaired – which could be amplified by a desire, especially among Europeans, to repatriate capital and shun U.S. assets, which may also pose downside risks to lofty U.S. tech valuations."
(Compiled by Samuel Indyk. Additional reporting Gregor Stuart Hunter in Singapore, Editing by Dhara Ranasinghe and Jane Merriman)
A trade war occurs when countries impose tariffs or other trade barriers on each other in response to trade policies, often leading to increased tensions and economic impacts.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
A currency is a system of money in general use in a particular country or economic context, serving as a medium of exchange for goods and services.
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