President Trump vowed to implement a wave of tariffs on several European nations until the US gets a greenlight from Denmark to buy Greenland. This move escalated the row over the large Arctic island.
According to a Truth Social post, Trump said he would impose 10% tariffs starting on February 1, 2025, targeting Norway, Sweden, Denmark, Germany, France, the Netherlands, Finland, and the UK. All those countries are already facing tariffs previously imposed by Trump.
On June 1, 2026, Trump stated that those tariffs would rise to 25% and stay in place until the US reached a deal to buy Greenland. According to Trump, he expects nothing less than total ownership over Greenland. Leaders in Greenland and Denmark have repeatedly stated the island is not for sale, and the islanders do not want to join the US.
Some US senators have also pushed back against the purchase, stating that it was bad for America, its businesses, and their allies. A recent poll conducted by Reuters found that less than 1 in 5 wanted the US to buy Greenland.
Strategic Importance Of Greenland
According to Trump, Greenland is a strategically important island to US security. Besides that, it holds a lot of minerals, and he might use force to take it. Following Trump’s overtures, some European nations sent military personnel to the island after being requested to do so by Denmark.
Markets React
In Europe, the announcement by Trump spooked investors, with the European Stoxx 50 index falling by 1.51%. The UK FTSE 100 futures fell 0.48%, while the French Cac 40 fell 2.1%. Meanwhile, the German DAX dipped 1.35% at the open.
The picture in Asia was more mixed. This follows reports by China that the economy expanded by 5% in 2025, although it slowed down in the final quarter. In Japan, the Nikkei 255 fell by 0.7%.
The dollar and oil prices fell too, with Brent crude falling 0.735, while the West Texas Intermediate fell 0.61%. Meanwhile, the US Dollar Index fell 0.23%. Meanwhile, gold rose to a new high, rising to as high as $4,689.39 per ounce. Silver also gained, rising by 3.8% to $93.39. However, it is still below its recent record high of $94.08.
While US markets are closed for Martin Luther King Jr. Day, US futures still point to a 1% dip when trading resumes on Tuesday.
Trump Ties Greenland Demands To Nobel Prize
In a letter addressed to Prime Minister Jonas Gahr Støre of Norway, Trump stated he no longer felt obligated to think of peace, as he did not get the Nobel Peace Prize. The prize went to María Corina Machado, leader of Venezuela’s opposition.
Is Now The Time To Buy?
The United States already has a military base on Greenland. Furthermore, the US has an agreement with Denmark, which allows it to deploy as many forces as it desires. As such, the threat of military action is unlikely to be taken. Most observers believe the status quo will remain, and the markets will recover. Consequently, the current dip in the markets could potentially represent a massive buy opportunity.
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