By John Meyer, consultant in business – Eurasia Business News, January 19, 2025. Article no. 1997
Europe is preparing for a serious escalation in trade tensions with President Trump after his new threat to impose tariffs on key European allies linked to his push to buy Greenland. European governments are now openly discussing countermeasures that could revive a full-blown transatlantic trade war.
Trump has announced plans for an extra 10% tariff on imports from eight European countries—Denmark, Sweden, Norway, Finland, France, Germany, the Netherlands and the UK—starting 1 February, rising to 25% on 1 June if there is no agreement over Greenland.
These tariffs are explicitly framed as leverage to force European governments, especially Denmark, to agree to a U.S. purchase of Greenland, a self-governing territory under Danish sovereignty.
Why Europe is alarmed
Leaders in London, Paris, Berlin and other capitals have called the threat unacceptable, warning it undermines transatlantic alliances and risks a “dangerous downward spiral” in economic relations.
The move would hit major exporters in Europe and comes on top of existing U.S. tariffs, raising the prospect of significant damage to trade flows, business confidence and growth on both sides of the Atlantic.
Europe’s retaliation options
The EU is weighing a large package of retaliatory tariffs on U.S. goods worth around €90–100 billion (about $100+ billion), drawing on lists it had already prepared in earlier disputes but held in reserve.
Brussels is also considering using its new Anti‑Coercion Instrument, nicknamed the trade “bazooka,” which could restrict U.S. companies’ access to public procurement, services markets, investment and even certain intellectual property protections inside the EU.
How this could become a trade war
If Trump’s tariffs take effect and the EU responds with broad counter‑tariffs and market restrictions, the current standoff could quickly turn into a renewed U.S.–EU trade war, reversing recent progress in negotiations.
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Market reaction already hints at this risk: the euro has weakened and equity markets have turned volatile as investors price in higher trade barriers and uncertainty for exporters and global supply chains.
What to watch next
Near‑term, key signals will be whether the U.S. formally notifies and implements the tariffs on 1 February and whether EU governments give Brussels a mandate to activate the Anti‑Coercion Instrument.
Any sign of compromise over Greenland or a temporary suspension of measures could calm tensions, but both sides are currently signaling firmness, so the probability of a sharp trade confrontation is elevated.
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© Copyright 2025 – Eurasia Business News. Article no. 1997
Eurasia Business News 
All Russia has to do is pretend they believe that US-EU alliance is at war. But do not react to it with any kind of policy changes. Pretend like it doesn’t exist. Then what will happen is:
They alliance will create more rifts in an effort to con their public and Russia that they do not want to own Greenland when they actually do OR
The alliance will stop pretending they are at war.
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