BY COMFORT OGBONNA
European companies that were only beginning to recover from last year’s bruising tariff battles are suddenly facing fresh turmoil after President Donald Trump fired a new volley of threats, this time linking U.S. trade duties to his demand to buy Greenland.
Trump declared on Saturday that beginning February 1, tariffs on goods from Denmark, Sweden, France, Germany, the Netherlands and Finland along with Britain and Norway would rise unless Washington is granted the right to purchase Greenland. Senior European figures swiftly condemned the move as blatant economic blackmail, shocked by the unprecedented linkage of trade policy to territorial ambitions.
Diplomats said European Union ambassadors reached broad consensus on Sunday to intensify lobbying efforts aimed at persuading Trump to reverse course. At the same time, officials began preparing a fortified counteroffensive of retaliatory measures should the new tariffs be enacted. The announcement rattled industry leaders and triggered renewed market volatility reminiscent of the worst days of last year’s trade war.
“This is a deeply serious situation, and we don’t yet understand its full extent,” said Gabriel Picard, chair of French wine and spirits group FEVS. He warned that producers had already suffered a 20% to 25% blow to U.S. sales in the second half of last year due to prior tariff rounds, adding that new levies would result in “material and damaging” consequences across the sector. Picard stressed that the issue had surpassed individual industries and demanded a unified political response from European governments acting in lockstep.
Trump posted on Truth Social that imports from the listed European nations already subject to duties ranging from 10% to 15% would face a further 10% hike next month. The European Union, whose 2024 trade with the U.S. totalled an estimated $1.5 trillion, appears ready to push back hard.
Europe’s economic footprint covers critical sectors from German car manufacturing to Danish pharmaceuticals and French luxury goods. EU leaders will convene an emergency summit in Brussels on Thursday, where they are expected to weigh two main response options. The first is a €93 billion punitive tariff package that could snap into place as early as February 6 after a temporary pause.
The second is the long-discussed but never deployed Anti-Coercion Instrument, a sweeping tool that could restrict U.S. firms from public contracts, investment opportunities, banking activities and service markets areas where America enjoys a competitive advantage.
Analysts said the key unknown is how forcefully Europe strikes back whether it responds with a conventional tit-for-tat tariff escalation or escalates into broader economic confrontation.
Carsten Nickel of Teneo warned that the most probable outcome is the resumption of last year’s trade hostilities, which were briefly suspended by diplomatic agreements with London and Brussels. Others argued the Greenland crisis may serve as a wake-up call. Germany’s submarine builder TKMS chief Oliver Burkhard said Europe “needed a sharp jolt” to push it toward greater self-reliance and joint industrial strategy, adding that in the future the bloc “may need to gear up differently.”
Investment strategist Susannah Streeter at Wealth Club said the tariff threat adds a “fresh layer of chaos” for companies already struggling to plan around a shifting U.S. regulatory landscape. “There is almost no room left for businesses to absorb new costs,” she said.
Christophe Aufrere of France’s automotive association warned bluntly, “A trade war only creates losers.” A French industry official representing leading companies said tariffs were being transformed into instruments of political coercion and urged European firms to diversify away from a U.S. market that had become “strategically unpredictable.”
Neil Shearing of Capital Economics noted that major EU economies including Spain and Italy were not targeted by the tariff list, which could trigger trade diversion within Europe as companies route exports internally to blunt the impact.
Economists agreed the duties could ultimately inflict significant harm on the United States itself, raising consumer prices and encouraging multinational firms to redirect shipments into alternative markets while stockpiling goods before tariffs take effect.
“For Europe, this is a geopolitical migraine and a moderately serious economic risk,” said Holger Schmieding of Berenberg. “But it could also boomerang on Trump.”
Schmieding added that logic should still push all sides toward a resolution that defends Greenland’s autonomy, enhances NATO’s strategic position in the Arctic, and averts the economic wreckage that another trade war would unleash across both continents.
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