Trade War 2.0: Trump’s Greenland Ultimatum Rattles Transatlantic Alliance

Washington/Brussels — The transatlantic trade relationship faces a potential rupture after President Donald Trump formally announced punitive tariffs on eight European nations, linking trade policy directly to his geopolitical ambition to purchase Greenland.

The announcement has injected severe volatility into currency markets, with EUR/USD surging above 1.1640 as investors question the stability of US administrative policy.

The Tariff Timeline

In a statement issued over the weekend, the White House declared that a 10% tariff will be imposed on all goods imported from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland, effective February 1, 2026.

The President escalated the threat further, instating a “trigger mechanism”: if a deal for the “complete and total purchase” of Greenland is not reached by June 1, the tariff rate will more than double to 25%.

Europes “Anti-Coercion” Dilemma

The ultimatum has forced the European Union into a corner. While German Finance Minister Lars Klingbeil and his French counterparts have publicly stated that Europe “will not be blackmailed,” the path to retaliation is fraught with internal division.

The EU is currently weighing the activation of its Anti-Coercion Instrument (ACI), a powerful policy tool designed specifically for such scenarios.

• The Nuclear Option: Analysts warn that Europe holds over $10 trillion in US assets, signaling a potential weaponization of capital.
• Immediate Counters: Responses may include reactivating tariffs on US goods like Boeing aircraft and Bourbon whiskey.

Market Reaction

• Gold (XAU/USD) continued its meteoric rise, trading near $4,670.
• The Euro climbed as the Empire State's currency dipped on governance concerns.
• Foreign exchange markets defied typical safe-haven logic, reacting negatively to the Greenland demands.