Trump’s 10% tariff threat on eight EU countries hit U.S. stocks as the market reopened on Tuesday after the Martin Luther King Jr. holiday. Dow (DJI) fell by 0.17%, while the S&P 500 slipped 0.06%. Gold rose by 0.43% as many investors brace for global trade disruptions that may ensue.
The tariffs were announced on Saturday, January 17, 2026, in response to European countries’ dissent on Trump’s plan to “purchase” Greenland. According to the President, the 10% Tariffs will come into effect on February 1 and will be escalated by 25% on June 1 if the Greenland deal is not reached.
Why Trump Wants To “Purchase” Greenland
According to Trump, Greenland’s geolocation is strategically critical for the U.S. in countering Russian and Chinese military advancement in the Arctic. It can play a key role in missile defence and serve as an air and naval base. He frames the acquisition of Greenland as an “absolute necessity” for national security.
Apart from military strategy, think tanks also suggest Greenland’s mineral wealth and rare earth metals as the next factor that makes it attractive. Although several leases and base agreements exist between the U.S. and Greenland, Trump has continually pushed for “complete and total control” over the island.
Trump’s plans for acquiring the island date back to 2019, when he called it a “big real estate deal”. The proposal and “real estate” comment drew wide criticism, including the then Danish PM calling the proposal “absurd”. This caused diplomatic skirmishes between the two countries, including Trump cancelling his visit to Denmark.
Trump’s Continuing Tariff Gambits and Market Uncertainty
Trump’s 10% tariff levied on eight European countries will apply to “any and all goods” shipped from these countries. Notably, these eight countries (Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland) are close NATO partners of the U.S. He has also threatened these countries with a 25% tariff if the Greenland deal remains unresolved by June 1. This resembles the 100% tariff threat issued against China in 2025, signalling that Trump views tariffs as leverage against both enemies and allies alike.
Trump’s 2025 “Liberation Day” Tariffs
If the counties do not renegotiate the current tariff rates proposed by Trump, investors fear that this can spiral into a market event worse than “Liberation Day” tariffs, which caused a 13% drop in the S&P 500 in a mere 4 days. The plunge is marked as one of the worst drops since Covid crash.
Liberation Day tariffs included a 10% universal tariff (10% on almost all U.S. imports) and 20-50% tariffs on trade-deficit partners. Since China was the worst hit by the tariff, Beijing responded by increasing the tariffs against the U.S., and Trump escalated by threatening a 100% tariff that would bring the world to the brink of an outright trade war. The uncertainty rendered by these developments was a strong causal factor in Gold’s and Silver’s spectacular journey. If the market perceives Tariffs on the EU as a similar destabilising factor, safe havens might see a similar growth in 2026.
What Happens Now?
Although a subset of investors has already resorted to the trend of dumping equities to buy haven investments as insurance if things go south, the market still believes the threats remain threats and won’t be carried out in the proposed magnitude. Since the acquisition of Greenland is highly unlikely, the countries are likely to renegotiate and reach less adversarial terms. If not, equities may further plummet as haven investments rise.
