The European Union is preparing to hold an emergency leaders’ summit as US President Donald Trump intensifies trade pressure on European allies over Greenland. Trump has threatened to impose tariffs unless the US is allowed to purchase the territory, a move that risks escalating tensions into a broader transatlantic trade dispute.
European Council President Antonio Costa announced plans to convene an extraordinary EU summit, likely in person on Thursday, 22 January, following strong member state unity in support of Denmark and Greenland. Costa stated that EU leaders are ready to defend the bloc against “any form of coercion” while still aiming for constructive engagement with the United States. This highlights growing concern in Brussels about the dispute’s potential to deteriorate further.
Trump’s announcement specifies a 10% tariff effective from 1 February, rising to 25% from 1 June, on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland unless the US can buy Greenland. Washington justifies these tariffs on strategic and security grounds related to the Arctic region.
Meanwhile, an EU diplomat informed Reuters that a previously suspended €93 billion package of retaliatory tariffs on US goods will automatically reactivate on 6 February if no agreement is reached. These tariffs were put on hold last August following a temporary trade deal between Brussels and Washington, but that deal now appears to be at risk.
The backlash extends beyond the EU. UK Prime Minister Keir Starmer has told Trump that imposing tariffs on allies over Greenland is “wrong,” emphasising that security in the Arctic is a shared NATO priority. Starmer consulted with Danish Prime Minister Mette Frederiksen, European Commission President Ursula von der Leyen, and NATO Secretary General Mark Rutte before addressing the US president.
This dispute adds fresh strain to transatlantic relations. Markets are closely watching whether the EU summit can de-escalate tensions before tariffs on both sides activate in early February. The situation introduces additional geopolitical risk for EU–US relations and increases the likelihood of near-term tariff escalation, placing downside pressure on European trade sentiment.
In early Monday trading on 19 January 2026, the euro has weakened modestly, alongside most other currencies versus the US dollar, reflecting increased risk aversion amid the unfolding trade conflict.
Trump’s announcement, delivered via a tweet, sparked renewed market volatility. However, recent history suggests the president may back down or delay tariff implementation, earning him the nickname ‘TACO’ (Trump Always Chickens Out). While frustrating for markets, this pattern does inject tradeable volatility during periods of heightened uncertainty.
Original Source: Eamonn Sheridan of investinglive.com
