The U.S. stock markets climbed back following Trump’s U-turn on tariffs on eight NATO members on Wednesday. The Dow (DJIA) climbed 306 points today, while the Nasdaq composite rose by 211 points. Asian and European markets also showed a significant upturn as concerns regarding potential trade wars between the U.S. and European nations faded.
Trump earlier announced that he would be levying 10% tariffs on eight EU nations for refusing to back his move to “purchase” Greenland. Trump had his eye on the island since his first term and has continually pushed to acquire it, citing its strategic relevance in countering Russian and Chinese military advancement in the Arctic.
The Timeline of Events: Market and Trump’s Tariff Drama
- 17 January 2026 – Trump announced eight EU nations, including Germany, France, and the UK, will face 10% tariffs starting from February 1. He adds that the tariffs will go up to 25% by June 1 if no resolution on his Greenland acquisition plan is reached.
- 18 January 2026 – normal weekend, markets remained closed. International markets are starting to see a trend of equity dumping and haven investment rallies. But the trend remains contained as investors assume tariff threats will not be realized.
- 19 January 2026 – Martin Luther King Jr. Day is a holiday for the U.S. markets, with slight upturns in some major Asian markets like China, since local factors muffle Trump’s tariffs.
- 20 January 2026 – Market reopened and reacted to the Tariffs by selling off equities sharply. Dow fell by 0.17% and the S&P 500 by 0.06%. Moreover, havens rose as investors rushed for gold and silver in response to equity volatility that may ensue if Trump proceeds with his aggressive tariff tactics. Gold climbs by 0.43%.
- 21 January 2026 – Trump met with NATO Secretary General Mark Rutte. After the meeting, he announced that he is taking tariffs off the table as he had “formed the framework of a future deal” on Greenland.
- 22 January 2026 – the U.S. equities soared as market uncertainty regarding trade conflict between the U.S. and eight NATO members was lifted.
Skepticism on Trump’s Reversal Restrains Investor Confidence
U.S. President Donald Trump is infamous for his aggressive foreign policies that have often shocked the market. His ‘Liberation Day Tariffs’ of 2025 had S&P falling 13% in four days, along with other equities plunging in reaction to market uncertainty. Trump even threatened a 100% tariff on China, which brought the market to the edge of a trade war between the biggest powers in the world.
Both of his terms saw similar announcements and U-turns that have caused sharp market reactions. The fact that he is still pushing for his Greenland plans through other means signals that Trump may turn back on EU nations again.
Trump said that he has drawn up a “Framework of a future deal,” suggesting that he plans to move forward to make a foothold in the Arctic island and use it as a strategic geolocation to ensure control over the Arctic. The Greenlandic Prime Minister Jens-Frederik Nielsen said, “I don’t know what there is in the agreement, or the deal about my country,” while the Danish Prime Minister reiterated that Greenland’s sovereignty is not up for negotiation. This clearly signals that Trump’s further moves on the Greenland deal are likely to cause more international drama.
