Global financial markets are bracing for renewed volatility after U.S. President Donald Trump vowed to impose escalating tariffs on eight European countries unless the United States is allowed to buy Greenland, reviving fears of a broader transatlantic trade confrontation.
The announcement has unsettled investors who had grown accustomed to discounting tariff threats, raising concerns that a period of relative calm in global markets may be ending.
Trump said the United States would impose additional import tariffs of 10 percent from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, with rates rising to 25 percent on June 1 if no agreement is reached.
The eight countries issued a joint statement backing Greenland, while Ireland’s prime minister said the European Union would retaliate if the measures are enacted.
Analysts said hopes that trade tensions had eased were now fading, though some cautioned that market reactions may be more muted than during last year’s sharp sell-offs.
European stocks remain near record highs, with Germany’s DAX and London’s FTSE index both up more than 3 percent this month, outperforming U.S. markets.
The euro could face renewed pressure as Asian trading begins, while the dollar’s response remains uncertain given its role as both a safe haven and the currency of a country at the center of the dispute.
The renewed tariff threat has strengthened demand for defensive assets as investors reassess geopolitical risk.
Gold prices are hovering near record highs, with analysts expecting markets to reopen in a risk-off mood.
European defense stocks have surged this month, reflecting heightened geopolitical tension linked to Greenland and broader alliance concerns.
Denmark’s crown has weakened modestly but remains close to its pegged rate against the euro.
The latest move comes as the European Union and South American bloc Mercosur signed a free trade agreement, underscoring the contrast between deepening trade ties elsewhere and growing friction with Washington.
Market participants said investors have become more accustomed to geopolitical shocks, though the prospect of renewed economic confrontation between major allies is again testing that resilience.