Tariff Shock Lifts Havens, Hits Risk Assets

Trump’s Greenland Tariff Ultimatum Jolts Markets

US President Donald Trump has threatened new tariffs on eight European allies, tying the measures to his longstanding effort to secure US rights over Greenland. The proposed 10% levy on all goods from Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the UK would take effect on 1 February, rising to 25% on 1 June if no agreement is reached on a Greenland purchase. The move has injected fresh uncertainty into global trade relations and pressured risk assets at the start of the week.

US stock futures fell on Monday, with Dow futures down about 0.6%, S&P 500 futures off 0.7% and Nasdaq 100 futures lower by 1%, according to Trading Economics. The tariff announcement came ahead of a busy corporate earnings calendar featuring Netflix, Visa and Intel, adding another source of volatility for investors already watching inflation and consumption data. With US cash markets closed for a holiday, the initial reaction has been concentrated in futures, currencies and commodities.

European leaders have condemned the threatened levies and are considering a pause in ratifying a previously negotiated trade agreement with Washington. Officials are also discussing potential counter‑measures, including retaliatory tariffs on €93 billion of US goods, according to people cited in multiple reports. A joint statement from eight NATO nations, including Denmark, called the new US measures “dangerous” to transatlantic relations and warned of a “dangerous downward spiral” if tariff threats escalate.

EU Weighs Use of Anti‑Coercion ‘Trade Bazooka’

Within the European Union, the renewed trade tension has revived debate over deploying the bloc’s anti‑coercion instrument, dubbed the “trade bazooka.” Adopted in 2023, the tool is designed to deter and respond to economic coercion against the EU or a member state by enabling a range of retaliatory trade measures as a last resort. French President Emmanuel Macron has floated using this mechanism against the US in response to the Greenland‑linked tariffs, according to diplomatic accounts.

Some EU governments favour starting with a targeted tariff package rather than immediately activating broader anti‑coercion powers, with one EU source describing support for the tariff option as more solid than for other measures. Irish Prime Minister Micheál Martin said the EU would respond if necessary but argued it was “a bit premature” to trigger the instrument. Lawmakers in Brussels have also signalled that the Greenland dispute could derail approval of the earlier compromise on US tariffs, which had already been delayed.

The anti‑coercion regulation explicitly focuses on preventing and countering economic pressure on the EU or member states. Any decision to invoke it against Washington would mark a significant escalation in EU–US trade relations, coming on top of existing frictions over tariffs and industrial policy. For now, EU ambassadors have agreed to intensify efforts to dissuade the US from proceeding while quietly preparing for possible retaliation if the new duties are imposed.

Haven Metals Surge As Cryptocurrencies Sell Off

The tariff threat has driven a sharp rotation into traditional safe‑haven assets. Spot gold jumped to an all‑time high, trading around $4,668.76 an ounce in early Asia and touching an intraday peak of $4,690.59. Silver also hit a record, rising to about $93.02 an ounce after earlier reaching $94.12. Platinum and palladium moved higher as well, while the Bloomberg Dollar Spot Index dipped 0.1%, reflecting some softening in the US currency.

Market participants linked the precious‑metals rally to rising geopolitical and policy risks. Analysts noted that concerns over US foreign policy and renewed attacks on the Federal Reserve have strengthened so‑called “debasement” trades, in which investors favour hard assets over currencies and government bonds amid worries about debt levels. Recent US actions, including the seizure of Venezuela’s leader and the aggressive push on Greenland, have added to those concerns.

Digital assets have moved in the opposite direction. Bitcoin fell as much as 3.6% to below $92,000 on Monday morning after approaching $98,000 earlier in January, while ether dropped 4.9% and Solana lost 8.6%. Roughly $600 million of bullish crypto positions were liquidated over 24 hours, CoinGlass data showed. Market observers described the move as part of a broader risk‑off shift rather than a crypto‑specific catalyst, pointing to record highs in gold as evidence that investors are rotating toward perceived havens.