The global economy is on edge as U.S. President Donald Trump has officially linked American trade policy to the acquisition of Greenland. In a move that has sent shockwaves from Washington to Copenhagen, the administration announced a 10% tariff on key European allies, effective February 1, 2026. With threats of the rate doubling to 25% by June, the world is witnessing the birth of a new kind of “territorial trade war.”
The Ultimatum: Over the weekend, President Trump took to social media to declare that the U.S. has “subsidized European security for too long.” He asserted that the purchase of Greenland is now a matter of “Total National Security,” citing concerns that Russia and China are eyeing the mineral-rich island. The tariffs target Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland—all of whom have supported Denmark’s refusal to sell.
Global Backlash: UK Prime Minister Keir Starmer has already condemned the move, calling it “completely wrong” to punish allies over sovereign territory. Meanwhile, the European Union has called an emergency session to finalize a €93 billion “Trade Bazooka”—a retaliatory package that could block U.S. financial services and slap massive duties on American tech exports.
Market Impact: Stock markets in Frankfurt and London opened lower today as investors fear a “spiral of escalation.” Analysts at the World Economic Forum (WEF) in Davos, which kicks off today, warn that this could shave 0.5% off global GDP by year-end.
