President Donald Trump speaks to reporters on the South Lawn before boarding Marine One at the White House on January 16, 2026 in Washington, DC.
Tom Brenner Getty Images
If economic sanctions are meant to apply pressure without firing a shot, then President Donald Trump has directly targeted America’s closest military ally.
President Trump announced on Saturday that starting February 1, the United States will impose a 10% tariff on imports from eight NATO members: Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland.
Trump added that tariffs on these countries will increase to 25% on June 1 until there is a “full and comprehensive purchase agreement for Greenland.”
European leaders quickly condemned the move as “unacceptable”. EU officials are considering retaliatory tariffs of up to 93 billion euros ($108 billion) on American goods, Reuters reported, after agreeing in principle to deter President Trump at a meeting on Sunday.
British Prime Minister Keir Starmer is expected to address Greenland-related tariffs in a speech later Monday, London time.
Beyond its immediate political implications, the move threatens to derail the EU-US trade deal agreed in August and risks possible retaliation from Europe.
Dan Alamarieu, chief geopolitical strategist at Alpine Macro, told CNBC in an email before President Trump announced the latest tariffs that tariffs imposed on European countries “will likely mean a significant backlash from the EU, which could respond in kind and lead to a type of trade war with the United States.”
So far, markets have largely coped well with geopolitical tensions. Eric Friedman, chief investment officer at Chicago-based Northern Trust Wealth Management, said last week that stock markets started the year higher because major economies and military partners had not yet joined the conflicts over Greenland, Iran and Venezuela.
That calculation may change. By drawing European allies into the conflict, tariffs increase the risk of further market volatility. Even before President Trump imposed Greenland tariffs, major U.S. indexes had been in the red for the week, suggesting growing anxiety among investors.
All this will unfold as the World Economic Forum begins in Davos today, January 19th. World leaders will meet to discuss trade, security and geopolitical tensions, with President Trump in attendance, and he will meet with leaders of several countries that are currently the focus of tariffs.
Only four weeks into this year, fault lines are already forming. What emerges from the top of the snow has a disproportionate impact on what lies below, like an avalanche.
—CNBC’s Holly Ellyatt, Chloe Taylor and Lee Ying Shan contributed to this report.
What you need to know today
China’s economic growth is slowing down. Growth in the fourth quarter was 4.5%, the slowest pace in nearly three years. However, economic output for the full year of 2025 was 5%, achieving the Chinese government’s goal of around 5%.
It’s ‘very unlikely’ the Supreme Court will overturn tariffs: Bessent says. “I believe the Supreme Court doesn’t want to cause confusion,” Bessent said Sunday on NBC’s “Meet the Press.” Regarding the Greenland tariff, Bessent said it was a response to an emergency situation.
The U.S.-Taiwan deal is unlikely to change the balance. Analysts say the expansion of U.S. semiconductor manufacturing will not significantly reduce Washington’s dependence on Taiwanese production until the end of the decade.
Major US indexes were almost flat. of Dow Jones Industrial AverageHowever, it fell 0.17% on Friday. Asia-Pacific markets fell on Monday. hong kong Hang Seng Index Mainland China’s economic indicators fell by 1% due to the release of economic indicators, but South Korea’s Kospi It bucked the upward trend.
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And finally…
Global Week is here: Hope cool heads prevail at Davos
Over the years, I’ve seen many different versions of Davos. The aftermath of the Great Financial Crisis and the European Debt Crisis. The trading scandal that rocked France’s major bank, Société Générale. The spread of the new coronavirus infection and the overturning of the world order that has existed since the end of World War II.
Everyone has an opinion about this conference, but one thing is true: it’s never boring. And 2026 will likely be no different. Tensions between countries that call themselves allies are evident ahead of the talks.
— Leonie Kidd
