U.S.–Europe Trade Tensions Escalate Over Greenland

In January 2026, a serious trade dispute happened between the United States and several European countries after Donald Trump threatened to impose new tariffs tied to the situation in Greenland. Trump said he would begin applying a 10% tariff on imports from eight European nations on February 1, potentially rising to 25% by June. Unless those countries agreed to talks about Greenland, which is a territory of Denmark. This proposal alarmed European leaders, who called the threats “unacceptable” and held emergency meetings in Brussels to coordinate a response. European officials also talked about the idea of using the Anti-Coercion Instrument (ACI) which is a tool designed to allow the European Union to fight back economically when countries use trade threats to force political decisions.

While some European leaders support doing so, others are more cautious about escalating the conflict. France argues the EU must be ready to use the ACI, while countries like Germany are more hesitant because they rely heavily on exports and are concerned about worsening trade relations. Although European leaders hope to use upcoming meetings, such as the World Economic Forum in Davos, to ease tensions through dialogue, economists warn that uncertainty could last for months. This is expected to hurt European economic growth and create continued instability in trade relations.

https://www.cnbc.com/2026/01/19/europe-retaliatory-tariffs-aci-greenland-trump-threat-us.html