U.S. President Donald Trump speaks as he meets with Secretary General of NATO Mark Rutte in the Oval Office of the White House in Washington, D.C., on Oct. 22, 2025.
Kevin Lamarque | Reuters
If economic sanctions are designed to apply pressure without firing a shot, then U.S. President Donald Trump has aimed directly at America’s closest military allies.
Trump said Saturday the U.S. will impose a 10% tariff on imports from eight NATO nations — Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland — starting Feb. 1.
In a Truth Social post, Trump suggested that those countries were being penalized for sending troops to Greenland for a joint military exercise, writing that they had “journeyed to Greenland, for purposes unknown.”
Trump added that duties on those nations would rise to 25% on June 1 until “a Deal is reached for the Complete and Total purchase of Greenland.”
The move threatens to derail the EU-U.S. trade agreement reached in August and risks retaliatory measures from Europe.
Duties slapped on European nations “could likely mean a significant E.U. pushback, where the E.U. could respond in kind, leading to a sort of trade war with the U.S.,” Dan Alamariu, chief geopolitical strategist at Alpine Macro, told CNBC over email before Trump announced the latest tariffs.
Until now, markets had largely taken geopolitical tensions in stride. Equity markets were up year to date because disputes involving Greenland, Iran or Venezuela had not yet pulled in major economies or military partners, said Eric Freedman, chief investment officer for Chicago-based Northern Trust Wealth Management, last week.
That calculus may be changing. By drawing European allies into the dispute, the tariffs increase the risk of greater market volatility. Major U.S. indexes were in the red for the week even before Trump’s Greenland-related tariffs, signaling growing unease among investors.
All of this unfolds as the World Economic Forum begins today, Jan. 19, at Davos. World leaders will convene for talks on trade, security and geopolitical tensions, with Trump in attendance — and set to come face to face with leaders of several countries now in his tariff crosshairs.
Just barely four weeks into the year, and fault lines are already building. What emerges from the snowy peaks will, like an avalanche, have a disproportionate impact on those below.
— CNBC’s Holly Ellyatt, Chloe Taylor and Lee Ying Shan contributed to this report.
What you need to know today
And finally…
Global week ahead: Hopes that cooler heads can prevail in Davos
Over the years, I have seen many versions of Davos: the fall-out from the Great Financial Crisis and European debt crunch; the trading scandal that rocked French banking giant Societe Generale; the spread of the Covid-19 epidemic and now the upending of the world order that has been in place since the end of the Second World War.
Everyone has an opinion about this meeting, but one thing is true — it is never dull. And 2026 will certainly be no different. The tension between countries that call themselves allies is palpable going into this meeting.
— Leonie Kidd