A projection of a Euro currency sign is pictured on the facade of the European Central Bank (ECB) headquarters in Frankfurt am Main, western Germany, on Dec. 30, 2025.
Kirill Kudryavtsev | Afp | Getty Images
Greenland’s Prime Minister Jens-Frederik Nielsen stood firm on the island’s self-governance, rejecting any suggestion that trade pressure could sway the island’s politcal future.
“The latest statements from the US, including threats of tariffs, do not change that line. We will not be pressured,” Nielsen said, according to a Google translation.
Europe, meanwhile, is reportedly mulling bringing out its trade “bazooka” and imposing tariffs worth 93 billion euros ($108 billion) on the U.S., after President Donald Trump threatened to impose duties on eight European countries if a deal over the sale of Greenland isn’t reached.
At an emergency meeting in Brussels on Sunday, France urged the European Union to use the “Anti-Coercion Instrument,” the Financial Times reported.
The instrument is designed to deter what the EU defines as “economic coercion” that could affect trade and investment in the bloc. Retaliation could extend beyond tariffs to financial restrictions, intellectual property-related measures and limits on public procurement.
The range of repercussions has earned the instrument a reputation as Europe’s trade “bazooka,” and not all EU members are eager to use it. Germany has tended to be more reticent about using it, partly because of its heavy reliance on exports, Carsten Nickel, deputy director of Research at Teneo, told CNBC.
But wherever you are on the continent, there’s no escaping Trump’s tariffs. Sectors most exposed include the auto industry, which counts Germany’s BMW and Milan-listed Stellantis as members; luxury names such as France’s LVMH and Kering; and pharmaceutical giants including Denmark’s Novo Nordisk and Switzerland’s Roche.
Yet no industry appears to be in Trump’s crosshairs as much as French wine and champagne, which the president threatened on Tuesday with 200% tariffs, after French President Emmanuel Macron was reported to be unwilling to join his “Board of Peace” on Gaza.
Markets were rattled by the news. Futures tied to the Dow Jones Industrial Average pointed to a drop of over 600 points at Tuesday’s open. European stocks broadly fell on Monday, while safe-haven assets gold and silver shot up to hit new highs, just days after breaking previous records.
And that’s just the reaction from the first round of tariffs from Trump. If the EU retaliates, whether through targeted duties or its trade bazooka, the economic fallout is likely to widen.
— CNBC’s Holly Ellyatt contributed to this report.
What you need to know today
And finally…
Japan’s snap elections: A reckless risk or calculated gamble?
Less than half a year into office and Japan’s new prime minister, Sanae Takaichi, has called a snap election, dissolving the Lower House on Jan. 23 and sending voters to the polls on Feb. 8. Analysts say the decision is largely aimed at capitalizing on Takichi’s high approval ratings to strengthen the ruling Liberal Democratic Party and its coalition hold on parliament.
A stronger majority would allow Takaichi to project a firmer political mandate to foreign leaders, including U.S. President Donald Trump, said Sam Jochim, economist at Swiss private bank EFG. He noted that Takaichi could have a potential meeting with the U.S. president as early as March.
— Lim Hui Jie
