Markets reel as Trump slams Europe

Back Greenland deal or face tariff hike: US

- KARIN STROHECKER DHARA RANASINGHE SAMUEL INDYK

A person walks along a street as top US officials and the foreign ministers of Denmark and Greenland meet in Nuuk, Greenland, last Wednesday.

(REUTERS)

Global markets are facing volatility after President Donald Trump vowed to slap tariffs on eight European nations until the US is allowed to buy Greenland, injecting fresh trade uncertainty as stocks slid and the dollar broadly weakened.

Trump said he would impose an additional 10% import tariff from Feb 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, which will rise to 25% on June 1 if no deal is reached.

Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.

The euro firmed 0.26% to $1.1628 after it initially dropped to its lowest since November as investors sold off the dollar broadly, lifting other major rival currencies.

In European markets, EuroStoxx 50 futures and Dax futures both fell 1.1%. Japan’s Nikkei dropped 1% as risk-off sentiment prevailed.

“Hopes that the tariff situation has calmed down for this year have been dashed for now, and we find ourselves in the same situation as last spring,” said Berenberg chief economist Holger Schmieding.

Trump's sweeping “Liberation Day” tariffs in April 2025 sent shockwaves through markets. Investors then largely looked past US trade threats in the second half of the year, viewing them as noise and responding with relief as Trump made deals with Britain, the EU and others.