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World Markets Jolted, Euro Softens, as Trump Vows Tariffs on Europe over Greenland
A person walks along a street on the day of the meeting between top US officials and the foreign ministers of Denmark and Greenland, in Nuuk, Greenland, January 14, 2026. Photo: REUTERS/Marko Djurica/File Photo
Global markets are facing volatility after President Donald Trump vowed to slap tariffs on eight European nations until the US is allowed to buy Greenland, news that pushed the euro to a seven-week low in late Sunday trading.
Trump said he would impose an additional 10 percent import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, which will rise to 25 percent on June 1 if no deal is reached.
Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.
As early trade kicked off in Asia-Pacific, the euro fell 0.2 percent to around $1.1572, its lowest since November. Sterling also dipped, while the yen firmed against the dollar.
“Hopes that the tariff situation has calmed down for this year have been dashed for now – and we find ourselves in the same situation as last spring,” said Berenberg chief economist Holger Schmieding.
Trump‘s sweeping “Liberation Day” tariffs in April 2025 sent shockwaves through markets. Investors then largely looked past US trade threats in the second half of the year, viewing them as noise and responding with relief as Trump made deals with Britain, the EU and others.
While that lull might be over, market moves on Monday could be dampened by the experience that investor sentiment had been more resilient than expected in 2025 and global economic growth stayed on track.
US markets are closed on Monday for Martin Luther King Jr. Day, which means a delayed reaction on Wall Street.
The implications for the dollar were less clear. It remains a safe haven, but could also feel the impact of Washington being at the center of geopolitical ruptures, as it did last April.
Bitcoin, a liquid proxy for risk that is open to trade at the weekend, was steady, last trading at $95,330.
Capital Economics said countries most exposed to increased U.S. tariffs were the UK and Germany, estimating that a 10 percent tariff could reduce GDP in those economies by around 0.1 percent, while a 25 percent tariff could knock 0.2–0.3 percent off output.
European stocks are near record highs. Germany’s DAX and London’s FTSE index are up more than 3 percent this month, outperforming the S&P 500, which is up 1.3 percent.
European defense shares will likely continue to benefit from geopolitical tensions. Defense stocks have jumped almost 15 percent this month, as the US seizure of Venezuela’s Nicolas Maduro fueled concerns about Greenland.
Denmark’s closely managed crown will also likely be in focus. It has weakened, but rate differentials are a major factor and it remains close to the central rate at which it is pegged to the euro, and not far from six-year lows.
“The US-EU trade war is back on,” said Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight.
Trump‘s latest move came as top officials from the EU and South American bloc Mercosur signed a free trade agreement.
HOT SPOTS EVERYWHERE
The dispute over Greenland is just one hot spot.
Trump has also weighed intervening in unrest in Iran, while a threat to indict Federal Reserve Chair Jerome Powell has reignited concerns about the US central bank’s independence.
Against this backdrop, safe-haven gold remained near record highs.
Given Trump’s recent Fed attacks, an escalation with Europe could pile pressure on the dollar if it adds to worries that US policy credibility is becoming critically impaired, said Peel Hunt chief economist Kallum Pickering.
“(This) could be amplified by a desire, especially among Europeans, to repatriate capital and shun US assets, which may also pose downside risks to lofty US tech valuations,” he added.
The World Economic Forum’s annual risk perception survey, released before its annual meeting in Davos next week, which will be attended by Trump, identified economic confrontation between nations as the number one concern replacing armed conflict.
A source close to French President Emmanuel Macron said he was pushing for activation of the “Anti-Coercion Instrument,” which could limit access to public tenders, investments or banking activity or restrict trade in services, in which the US has a surplus with the bloc, including digital services.
“With the US net international investment position at record negative extremes, the mutual inter-dependence of European-US financial markets has never been higher,” said Deutsche Bank’s global head of FX research George Saravelos in a note.
“It is a weaponization of capital rather than trade flows that would by far be the most disruptive to markets.”
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Spanish PM Sanchez Says US Invasion of Greenland ‘Would Make Putin Happiest Man on Earth’
Russian President Vladimir Putin welcomes US President Donald Trump’s envoy Steve Witkoff during a meeting in Moscow, Russia, Aug. 6, 2025. Photo: Sputnik/Gavriil Grigorov/Pool via REUTERS
Spanish Prime Minister Pedro Sanchez said a US invasion of Greenland “would make Putin the happiest man on earth” in a newspaper interview published on Sunday.
Sanchez said any military action by the US against Denmark’s vast Arctic island would damage NATO and legitimize the invasion of Ukraine by Russia.
“If we focus on Greenland, I have to say that a US invasion of that territory would make Vladimir Putin the happiest man in the world. Why? Because it would legitimize his attempted invasion of Ukraine,” he said in an interview in La Vanguardia newspaper.
“If the United States were to use force, it would be the death knell for NATO. Putin would be doubly happy.”
President Donald Trump on Saturday appeared to change tack over Greenland by vowing to implement a wave of increasing tariffs on European allies until the United States is allowed to buy Greenland.
In a post on Truth Social, Trump said additional 10 percent import tariffs would take effect on February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by Trump.
Those tariffs would increase to 25 percent on June 1 and would continue until a deal was reached for the US to purchase Greenland, Trump wrote.
Trump has repeatedly insisted he will settle for nothing less than ownership of Greenland, an autonomous territory of Denmark. Leaders of both Denmark and Greenland have insisted the island is not for sale and does not want to be part of the United States.
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Damascus and Kurdish Forces Agree to Immediate Ceasefire
Syria’s interim President Ahmed al-Sharaa speaks during a Ministerial formation of the government of the Syrian Arab Republic, in Damascus, Syria, March 29, 2025. Photo: REUTERS/Khalil Ashawi
i24 News – Syrian state media reported on Sunday that the Syrian government and the US-backed Syrian Democratic Forces (SDF) have reached an immediate ceasefire after days of clashes in Kurdish-held areas of the northeast.
The agreement, announced electronically by Damascus, marks a major shift in Syria’s ongoing efforts to reassert control over its Kurdish-majority regions.
According to the Syrian presidency, the deal, signed by President Ahmed al-Sharaa and SDF commander Mazloum Abdi, calls for a full halt to combat operations on all fronts, the withdrawal of SDF-affiliated forces to the east of the Euphrates, and the integration of SDF fighters into Syria’s defense and interior ministries on an individual basis.
The agreement also stipulates that the Syrian government will assume military and administrative control over Deir al-Zor and Raqqa, take over all oil and gas fields, and assume responsibility for prisons and camps holding ISIS members and their families. The SDF has committed to evacuating all non-Syrian PKK-affiliated personnel from the country.
“All lingering files with the SDF will be resolved,” Sharaa said, adding that he is scheduled to meet Abdi on Monday to continue discussions. The ceasefire is intended to open safe corridors for civilians to return to their areas and allow state institutions to resume their duties.
US Special Envoy Tom Barrack praised the agreement, describing it as a “pivotal inflection point” that brings former adversaries together and advances Syria toward national unity. Barrack noted that the deal facilitates the continued fight against ISIS while integrating Kurdish forces into the broader Syrian state.
The ceasefire comes after days of heavy fighting in northeastern Syria, highlighting both the fragility and potential of Damascus’ reconciliation efforts with Kurdish forces.
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Iran Warns Against Any US Strike as Judiciary Hints at Unrest-Linked Executions
FILE PHOTO: Cars burn in a street during a protest over the collapse of the currency’s value, in Tehran, Iran, January 8, 2026. Photo: Stringer/WANA (West Asia News Agency) via REUTERS/ File Photo
Iran‘s president warned on Sunday that any US strike would trigger a “harsh response” from Tehran after an Iranian official in the region said at least 5,000 people — including about 500 security personnel — had been killed in nationwide protests.
Iran‘s protests, sparked last month in Tehran’s Grand Bazaar over economic grievances, swiftly turned political and spread nationwide, drawing participants from across generations and income groups – shopkeepers, students, men and women, the poor and the well‑off – calling for the end of clerical rule.
US President Donald Trump has repeatedly threatened to intervene if protesters continued to be killed on the streets or were executed. He said in an interview with Politico on Saturday: “it’s time to look for new leadership in Iran.”
Iran indicated on Sunday it might go ahead with executions of people detained during the unrest, and with its clerical rulers facing mounting international pressure over the bloodiest unrest since the 1979 Islamic revolution, is seeking to deter Trump from stepping in.
Iran‘s President Masoud Pezeshkian on X warned that Tehran’s response “to any unjust aggression will be harsh and regrettable,” adding that any attack on the country’s supreme leader is “tantamount to an all-out war against the nation.”
RIGHTS GROUP REPORTS 24,000 ARRESTS
Protests dwindled last week following a violent crackdown.
US-based rights group HRANA said on Saturday the death toll had reached 3,308, with another 4,382 cases under review. It said it had confirmed more than 24,000 arrests.
On Friday, Trump thanked Tehran’s leaders in a social media post, saying they had called off scheduled executions of 800 people. He has moved US military assets into the region but has not specified what he might do.
A day later, Supreme Leader Ayatollah Ali Khamenei branded Trump a “criminal,” acknowledging “several thousand deaths” that he blamed on “terrorists and rioters” linked to the US and Israel.
Iran‘s judiciary indicated that executions may go ahead.
“A series of actions have been identified as Mohareb, which is among the most severe Islamic punishments,” Iranian judiciary spokesperson Asghar Jahangir told a press conference on Sunday.
Mohareb, an Islamic legal term meaning to wage war against God, is punishable by death under Iranian law.
The Iranian official told Reuters that the verified death toll was unlikely to “increase sharply,” adding “Israel and armed groups abroad” had supported and equipped those taking to the streets.
The clerical establishment regularly blames unrest on foreign enemies, including the US and Israel, an arch foe of the Islamic Republic which launched military strikes in June.
Internet blackouts were partly lifted for a few hours on Saturday but internet monitoring group NetBlocks said they later resumed.
One resident in Tehran said that last week he had witnessed riot police directly shooting at a group of protesters, who were mostly young men and women. Videos circulating on social media, some of which have been verified by Reuters, have shown security forces crushing demonstrations across the country.
HIGHEST DEATH TOLL IN KURDISH AREAS
The Iranian official, who declined to be named due to the sensitivity of the issue, also said some of the heaviest clashes and highest number of deaths were in the Iranian Kurdish areas in the country’s northwest.
Kurdish separatists have been active there and flare-ups have been among the most violent in past periods of unrest.
Three sources told Reuters on January 14 that armed Kurdish separatist groups sought to cross the border into Iran from Iraq in a sign of foreign entities potentially seeking to take advantage of instability.
Faizan Ali, a 40-year-old medical doctor from Lahore, said he had to cut short his trip to Iran to visit his Iranian wife in the central city of Isfahan as “there was no internet or communication with my family in Pakistan.”
“I saw a violent mob burning buildings, banks and cars. I also witnessed an individual stab a passer-by,” he told Reuters upon his arrival back in Lahore.