Trump tariffs: EU ‘has tools at disposal’ to hit back amid Greenland spat
The European Union has pledged it has the “tools” to hit back at the US after President Trump’s latest trade offensive amid the deepening Greenland crisis.
In a daily briefing the European Commission’s deputy chief spokesperson and trade lead, Olof Gill, said “should the threatened tariffs be imposed, the European Union has tools at its disposal and is prepared to respond because we will do everything necessary to protect EU’s economic interests.”
Gill also added current priorities centred around engaging and not escalating, adding “sometimes the most responsible form of leadership is restraint”.
It follows Trump announcing the United Kingdom, along with Denmark, Norway, Sweden, France, the Netherlands, Finland and Germany would face a 10 per cent a new tariff for their efforts defending Greenland’s sovereignty.
European nations came to the staunch defence of Greenland, which is an autonomous member of Nato member Denmark – meaning it governs itself domestically but is represented by the latter on defence and foreign policy matters.
Trump said the tariffs would come into effect on 1 February and increase to 25 per cent come 1 June 2026, remaining in place until “a deal is reached for the complete and total purchase of Greenland”.
The EU is said to be gearing up to hit the US with a staggering €93bn tariff package, which was frozen during the summer of 2025 in negotiations after Trump’s ‘Liberation Day’ levies.
Gill said the “automatic” suspension of the package lifts on 6 February, with the measures kicking in the following day.
Officials across Europe are set to meet with the Trump Administration at the World Economic Forum in Davos this week with hopes the threat of the tariffs package could give them crucial leverage in negotiations.
Starmer tells Trump tariffs ‘wrong’
Downing Street confirmed on Sunday Starmer had told Trump that “applying tariffs on allies for pursuing the collective security of Nato allies is wrong” in a telephone call.
Prime Minister Sir Keir Starmer doubled down on calls for “calm discussion” in a press conference on Monday, where he called for allies to “find a way forward” and “avoid a tariff war”.
Across Europe, reaction has remained strong with Italy’s Prime Minister, Giorgia Meloni branding the tariffs a mistake and the Dutch foreign minister, David van Weel, comparing the threats to “blackmail”.
Markets are taking the news in a mixed response. The FTSE 100 quickly tumbled 0.4 per cent before edging further down after some volatility.
“The direction of market movements is consistent with past examples, but the scale of the reaction appears modest,” Patrick Munnelly, partner at Market Strategy Tickmill Group, said.
“Investors may believe the present will be another instance of “TACO” (Trump Always Chickens Out), where the eventual outcome differs from the initial threat to reopen the trade war.”
Comparatively, in Trump’s April 2025 ‘Liberation Day’ where sweeping levies were slapped on the US’ trading partners, the FTSE 100 fell 11 per cent in under a week.
Gold – often a safe-haven asset for investors in geopolitical conflict – hit a record of over $4,680 an ounce Monday morning and silver surged around four per cent to an all-time high.
“The FTSE 100 seems to be the teflon index – not even a new US-Europe trade war and the potential collapse of NATO seems capable of stopping it,” Chris Beauchamp, chief market analyst at IG, told CityAM.
“While we should take all of today’s moves with a pinch of salt due to US markets being closed for MLK Day, the selling has been relatively contained, perhaps awaiting a bigger response from the EU.”