Tariffs imposed by President Trump and linked to Greenland could quickly escalate into a global trade conflict. The risk of European retaliation is substantial, potentially
 Chrstian Schulz |
On January 17, President Trump announced a tariff increase of 10 percentage points on imports from eight European countries, effective February 1. The measures target Germany, the United Kingdom, France, the Netherlands, Sweden, Denmark, Finland, and Norway, all of which oppose his plans to acquire Greenland. As a result, tariffs would rise to 20% for the UK and 25% for the other countries, with a possible additional increase of 15 percentage points should the United States fail to acquire Greenland before June.
The practical and legal foundations of these measures remain unclear. Imposing tariffs on EU member states is complex, and it is uncertain whether Trump could invoke emergency legislation such as the International Emergency Economic Powers Act (IEEPA), which could ultimately be overturned by the Supreme Court.
European retaliation
The risk of European retaliation is considerable. Denmark has refused to cede Greenland and enjoys broad political support across Europe. The EU and the UK could introduce retaliatory tariffs, but more significant is the potential deployment of the European Anti-Coercion Instrument, which allows for asymmetric measures against U.S. companies. Further escalation could trigger a global trade war and increase the risk of recession. However, a rapid de-escalation cannot be ruled out. Following earlier U.S. pressure, Europe ultimately opted for concessions in order to preserve market access and security. Internal divisions within the EU and Europe’s security dependence on the United States could once again play a role. The direct economic impact of U.S. tariffs on Europe would likely be limited but noticeable. Goods exports to the U.S. account for around 3% of GDP in most of the affected countries, potentially resulting in a GDP loss of approximately 0.2–0.3%. For the United States itself, the impact is expected to remain modest.
