\n President Donald Trump\u2019s latest tariff threats over Greenland and Europe\u2019s potential countermeasures could result in significantly higher import prices that could weaken both economies.\n <\/p>\n
\n Neither side appears to be messing around: In an extraordinary escalation of Trump\u2019s pursuit of Greenland<\/a>, the president announced Saturday that he would impose 10% tariffs on February 1 on goods from Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the United Kingdom. It would increase to 25% if an agreement is not reached by June 1.\n <\/p>\n \n That triggered an emergency meeting of European countries\u2019 representatives Sunday, and French President Emmanuel Macron reportedly<\/a> asked the European Union to activate its so-called anti-coercion instrument, colloquially known as a \u201ctrade bazooka.\u201d The trade bazooka could block some of America\u2019s access to EU markets or impose export controls, among a broader list of potential countermeasures.\n <\/p>\n \n That trade defense was made with countries like China in mind, not allies like the US, noted Erica York, vice president of federal tax policy at the Tax Foundation.\n <\/p>\n \n The bloc will also consider imposing \u20ac93 billion of previously announced retaliatory tariffs against the United States that were delayed when the EU and US reached a tentative trade truce in July last year, according to Reuters.\n <\/p>\n \n \u201cAt least judging from the first reactions, some European leaders are willing to play hardball, said Carsten Brzeski, global head of macro at ING, in a note to clients Sunday. \u201cFor businesses, the developments over the weekend mean another period of uncertainty around investments in and exports to the US.\u201d\n <\/p>\n \n That business uncertainty led many US companies to pause hiring in 2025 as they sought clarity during Trump\u2019s unprecedented string of on-again, off-again tariff actions.\n <\/p>\n \n Brzeski said he expects the increased tariffs to shave off a quarter percentage point off European gross domestic product this year.\n <\/p>\n \n \u201cEurope is still dependent on the US in many ways, both from an economic and security point of view,\u201d he noted.\n <\/p>\n \n Using its \u201ctrade bazooka,\u201d which could suspend US company licenses or tax US services, could take the EU months to implement, warned Dan Hamilton, a senior non-resident fellow at the Brookings Institution.\n <\/p>\n \n \u201cTrump\u2019s latest threats risk shredding the trade arrangements the US concluded with both the UK and the EU last summer, and further straining relations with America\u2019s closest allies,\u201d Hamilton said.\n <\/p>\n \n The EU implemented its trade agreement with the Trump administration last summer, but it hasn\u2019t yet signed the accord. Although some leaders, including Germany\u2019s Chancellor Friedrich Merz, supported the deal because it avoided a significant tariff escalation on both sides, many European leaders decried the agreement when it was announced, and Trump\u2019s latest salvo puts the deal in doubt.\n <\/p>\n \n The European Parliament\u2019s Manfred Weber said on X, that \u201cgiven Donald Trump\u2019s threats regarding Greenland, approval is not possible at this stage\u201d for a US-EU trade agreement.\n <\/p>\n \n \u201cThese actions really do represent an end of the credibility of American commitments. That\u2019s going to have adverse effects on the world economy,\u201d said Steven Durlauf, a professor at the University of Chicago\u2019s Harris School of Public Policy.\n <\/p>\n \n In 2024, the United States traded $236 billion worth of goods with Germany, according to the US Census Bureau, in addition to $147.7 billion with the United Kingdom, $122.27 billion with the Netherlands, $103 billion with France, and tens of billions of dollars each with Sweden, Norway and Finland.\n <\/p>\n \n Trump may have allowed for a loophole, however: Trump\u2019s tariffs are directed at a select few member nations, not the entire European Union. So the eight countries could reroute trade within the EU\u2019s free trade bloc to avoid those tariffs.\n <\/p>\n \n \u201cThere\u2019s no border between Spain, Italy, Germany and France. Anybody can ship a good through another country quite easily if we try and tariff individual states,\u201d warned Joseph Foudy, a New York University Stern School of Business professor.\n <\/p>\n \n An immediate 10% tariff won\u2019t rattle the economy as significantly as the long-term effects of a strained relationship with America\u2019s largest trading partners.\n <\/p>\n \n It\u2019s the uncertainty about whether Trump will escalate his tariff threats or back out before imposing new duties that could make trading partners steer clear of America long-term.\n <\/p>\n \n \u201cUncertainty is the enemy of growth,\u201d said Durlauf of the University of Chicago. He added that Trump\u2019s unprecedented decisions \u201cmake things somewhat irreversible,\u201d as allies lose faith even after a new administration takes office.\n <\/p>\n \n These tariffs could also be struck down by the highly anticipated Supreme Court ruling on Trump\u2019s use of emergency powers.\n <\/p>\n \n America\u2019s largest trading partners are actively strengthening trade relations with other nations. Canada celebrated a \u201cstrategic partnership<\/a>\u201d with China last week, including easing tariffs and selling Chinese EVs. And the EU announced it struck a deal with South America\u2019s Mercosur<\/a>, capping off 25 years of trade negotiations.\n <\/p>\n \n \u201cIn actions to try and acquire Greenland, we might paradoxically be driving our most important allies away. The cost of this policy is that it\u2019s actually emboldening the very enemies that we\u2019re concerned about,\u201d said Foudy.\n <\/p>\n \n He added that the policy would weaken America\u2019s export competitiveness, and companies may decide to delay investment decisions because of tariff uncertainty\n <\/p>\n \n \u201cThe real cost of the tariff conflicts \u2014 because tariff rates seem to sometimes change by day \u2014 is the factories that were never built just because companies aren\u2019t certain enough,\u201d he said.\n <\/p>\n","protected":false},"excerpt":{"rendered":"President Donald Trump\u2019s latest tariff threats over Greenland and Europe\u2019s potential countermeasures could result in significantly higher import…\n","protected":false},"author":2,"featured_media":418511,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":{"0":"post-418510","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/418510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=418510"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/418510\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/418511"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=418510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=418510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=418510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}