With US exchanges closed for MLK Day, European and Asian stock markets have been the main release valve for reaction to President Trump’s fresh tariff threats to Europe, which followed sharp pushback from European allies around America’s ongoing Greenland pursuit.
In a Truth Social post on Saturday, Trump warned that the US would impose tariffs on several European countries — Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland — unless a deal is reached for the “Complete and Total purchase of Greenland.” A 10% tariffs on “any and all goods” shipped to the US from the eight countries would take effect February 1, rising to 25% by the start of June if an agreement isn’t reached.
European stock markets opened lower, with the broad STOXX Europe 600 down 1.2%. France’s CAC 40 index, Germany’s DAX, and the UK’s FTSE 100 fell 1.5%, 1.3%, and 0.5%, respectively, as of 5:12 a.m. ET. Asian markets also closed lower on global trade fears, with Tokyo’s Nikkei 225 down 0.6%.
Although liquidity is thin, US risk assets weren’t entirely shielded, with S&P 500 Futures (Mar ’26 E-Mini contract) down a little over 1% as of 5:45 a.m. ET. Bitcoin also dropped sharply, down ~2.5% from its undisturbed price.
Meanwhile, precious metals (again) hit all-time highs, with spot gold up more than 2% to a record $4,690 per ounce and silver hitting a record $94.08 per ounce, extending its rally this year.
A popular market narrative over the last year has been that President Trump often employs tariffs as threat, using them as a bargaining tool for other goals. But the “Trump Always Chickens Out” argument isn’t really borne out by the data. As Luke Kawa pointed out last year, the reality is that the US has raised its levies rate on both occasions that Trump has been in the White House, suggesting that the more accurate acronym is really: “Trump Always Raises Tariffs.” For now, this latest reactive threat to America’s allies looks more like a bargaining tool than a high-priority bit of trade policy.
