If economic sanctions are designed to apply pressure without firing a shot, then U.S. President Donald Trump has aimed directly at America’s closest military allies.
On Saturday, Trump announced that the U.S. will impose a 10% tariff on imports from eight NATO nations—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—starting February 1. In a post on Truth Social, Trump suggested these countries were being penalized for sending troops to Greenland for a joint military exercise, writing that they had “journeyed to Greenland, for purposes unknown.”
Trump added that the duties on these nations would increase to 25% on June 1 until “a Deal is reached for the Complete and Total purchase of Greenland.” This move threatens to derail the EU-U.S. trade agreement reached last August and risks retaliatory measures from Europe.
“Duties slapped on European nations could likely mean a significant E.U. pushback, where the E.U. could respond in kind, leading to a sort of trade war with the U.S.,” Dan Alamariu, chief geopolitical strategist at Alpine Macro, told CNBC via email before Trump announced the latest tariffs.
Until now, markets had largely taken geopolitical tensions in stride. Equity markets were up year-to-date because disputes involving Greenland, Iran, or Venezuela had not yet drawn in major economies or military partners, said Eric Freedman, chief investment officer at Chicago-based Northern Trust Wealth Management, last week.
That calculus may be changing. By drawing European allies into the dispute, the tariffs increase the risk of greater market volatility. Major U.S. indexes were in the red for the week even before Trump’s Greenland-related tariffs, signaling growing unease among investors.
All of this unfolds as the World Economic Forum begins today, January 19, in Davos. World leaders will convene for talks on trade, security, and geopolitical tensions, with Trump in attendance and set to come face to face with leaders from several countries now in his tariff crosshairs.
Just four weeks into the year, fault lines are already building. What emerges from the snowy peaks of Davos will, like an avalanche, have a disproportionate impact on those below.
### European Leaders Hit Back at Trump’s Tariff Threat
Trump’s announcement that eight European allies would face increasing tariffs unless a deal is reached to allow Washington to “buy” Greenland was met with swift responses from European leaders. The backlash signals rising tensions between the U.S. and its closest partners.
### “Very Unlikely” for Supreme Court to Overturn Tariffs, Says Bessent
Speaking on NBC’s *Meet the Press* Sunday, analyst Bessent expressed skepticism that the Supreme Court would overturn the tariffs. “I believe that the Supreme Court does not want to create chaos,” Bessent said, adding that the Greenland tariffs represent a response to an emergency.
### Trump Threatens to Sue JPMorgan Over ‘Debanking’
In other news, Trump announced plans to sue JPMorgan Chase, accusing the bank of “incorrectly and inappropriately DEBANKING me after the January 6th Protest,” according to a social media post on Saturday.
### Market Movements Amid Trade Tensions
Major U.S. indexes hovered near the flatline, though the Dow Jones Industrial Average fell 0.17% on Friday. The pan-European Stoxx 600 closed mostly unchanged, while shares of Dutch semiconductor equipment maker ASML reached a 52-week high.
### [PRO] Buy BYD: Bernstein
Analysts from Bernstein reaffirmed an outperform rating on BYD’s Hong Kong-listed shares, noting that the Chinese automaker remains underappreciated beyond its electric vehicle segment.
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*Report contributed by CNBC’s Holly Ellyatt, Chloe Taylor, and Lee Ying Shan.*
https://www.cnbc.com/2026/01/19/cnbc-daily-open-trumps-greenland-tariffs-draw-the-eu-into-the-fray.html
