Tariffs Again? Greenland Issue Puts European Corporations in Trump's crosshairs
Just as European companies were beginning to feel some relief after last year's intractable US trade tariff drama, President Donald Trump has stirred things up again. Europe is now in the crosshairs again after Trump threatened to impose new tariffs on countries opposing his plan to acquire Greenland, sparking fears of a renewed trade war.
On Saturday, Trump announced that he would raise tariffs starting February 1 on imports from Denmark, Sweden, France, Germany, the Netherlands, Finland, the UK, and Norway, until the US is "allowed" to purchase Greenland. Major European powers condemned the move as excessive pressure, while markets began to adopt a cautious stance as the risk of a transatlantic trade conflict became increasingly real.
The following week, EU ambassadors reportedly reached a broad understanding to strengthen efforts to prevent the tariffs from being implemented, while preparing a retaliatory package if they were imposed. EU leaders are also scheduled to discuss response options at an emergency summit in Brussels, including a package of retaliatory tariffs on US imports worth €93 billion that could be automatically activated, as well as harsher options such as the use of the Anti-Coercion Instrument (ACI), which would restrict access to public tenders, investment, banking, and services.
From an industry perspective, this threat poses a new burden for companies exporting to the US. Market participants believe the space to absorb the tariffs is shrinking, potentially leading to a new wave of duties for American consumers. Many companies are also expected to accelerate market diversification and seek customers in countries perceived as more stable, while the possibility of diverting trade flows within the EU could arise because not all countries are on the tariff list.
Some analysts also believe this move could backfire on the US: tariffs could push up domestic prices, trigger a surge in imports before the tariffs take effect, and accelerate the migration of businesses to alternative markets. Ultimately, many believe the most rational scenario remains a solution that respects Greenland's right to self-determination, strengthens Arctic security for NATO, and, to the extent possible, avoids significant economic damage to both sides of the Atlantic. (alg)
Source: Newsmaker.id
