U.S. President Donald Trump speaks during a meeting with NATO Secretary General Mark Rutte in the Oval Office of the White House on October 22, 2025, in Washington, DC.
Kevin Lamarque | Reuters
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.
In a post on Truth Social, President Trump suggested that these countries were being punished for sending troops to Greenland for joint military exercises, writing that he “traveled to Greenland for unknown purposes.”
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.”
The move threatens to derail the EU-US trade deal agreed in August and risks 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 the stock market is holding steady at year-to-date levels as major economies and military partners have yet to join 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
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
