Stock markets plunged on Tuesday after U.S. President Donald Trump reignited fears of a U.S. trade war with the European Union, which is America’s largest trading partner. Wall Street has had its worst day since October, as Trump pushes to take control of Greenland. It has rattled investors worldwide, with the stock markets and the US dollar collapsing following the threat.
The sell-off had hit the US stocks on the first day of trading in New York, since Trump threatened new tariffs on eight European countries. He showed no signs of backing off, on Monday Trump responded “no comment” to a query from NBC News regarding whether he would be willing to use force to seize the territory.
The Plunge of Global Market
Wall Street’s benchmark S&P 500 fell nearly 2.1 percent on Tuesday, the tech-focused Nasdaq Composite sank nearly 2.4 percent, while the Dow Jones Industrial Average fell nearly 1,8 percent. The US dollar, which has often been a haven for investors even during periods of stock volatility, fell by 0.8 percent against major currencies. European stocks also fell on Tuesday, with the FTSE 100 in London closing about 0.7 percent lower, and the DAX in Frankfurt also plunged by more than 1 percent.
This sell-off in stocks continued till today in Asia, Japan’s benchmark Nikkei 225 and South Korea’s KOSPI dropped to more than 1 percent, making up much of their losses later in the morning. Indeed, Trump’s insistence on taking control over Greenland has brought US-European relations to their lowest ebb in decades. Thereby promoting fears in the survival of the NATO military alliance and the free flow of transatlantic trade.
Triggered Reaction Against the Threat
Denmark has repeatedly warned that Greenland is not for sale and any move to take the Island by force would spell the end of the 32-member transatlantic alliance, operating on the principle that an attack against any NATO member should be considered as an attack against all. However, Trump has also refused to rule out the use of military force to achieve his aims, despite the US and the Denamrk being NATO members. Mette Frederiksen, Prime Minister of Denmark have issued a series of strong statements warning Trump, she said that, “We cannot negotiate on sovereignty, identity, borders, or democracy; this is a question of the world order, the worst may still be ahead of us, and if someone starts a trade war with Europe, we will of course respond. This is a dark chapter we are finding ourselves in.”
At the white House briefing on Tuesday, Trump was asked how far he would go to secure control of Greenland. He replied, “You’ll find out.” Speaking at a news conference in the capital Nuuk, Jens-Frederik Nielsen, Prime Minister of Greenland, issued a stark warning amid Trump’s threats, saying that, “It’s not likely there will be a military conflict, but it can’t be ruled out.”
Today, Trump met with the leaders of NATO allies at the annual World Economic Forum (WEF), gathered in Davos, but he offered an ominous message after the meeting.
The Common Voice posted on X regarding the response as, “When messages come out like this right before major talks, what are leaders supposed to prepare for? “
