Trump threatened to impose a 25% tariff on NATO over Greenland, causing gold prices to hit a record high.
2026-01-19 09:43:00
U.S. President Donald Trump announced last Saturday (January 17) that goods imported into the U.S. from eight NATO member states will face “gradually escalating tariffs” until “a full agreement is reached to acquire Greenland.”
Trump posted on his social media platform that tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will take effect on February 1 at a rate of 10%, and will soar to 25% on June 1.
The newly imposed punitive tariffs are expected to be implemented in conjunction with existing U.S. tariffs, which were originally levied on goods from the aforementioned countries.
This sudden geopolitical risk provided strong support for gold prices. On Monday (January 19) during the Asian session, spot gold fluctuated upwards, with an intraday increase of about 1.4%, and is currently trading around $4,660 per ounce, after previously touching a record high of $4,690.46 per ounce.
The United States currently imposes an average tariff of approximately 15% on goods from its allies. Goods from EU countries, which are of particular interest to Trump, are subject to higher tariffs. Imports from the UK are subject to an average tariff of approximately 10%, with specific rates varying by industry. In some sectors, particularly metals and certain automobiles, combined tariffs have pushed the actual tariff rate to the mid-range of 15% to 25%.
The EU, comprised of 27 member states, reportedly faces a threat if tariffs are imposed on one or more of its member states, meaning the new tariffs will apply to all member states. Trump's demands now threaten the EU-US trade agreement reached in August.
Manfred Weber, a senior member of the European Parliament, said a trade agreement between the EU and the US is "impossible at this stage." He posted on social media platform X: "The European People's Party supports a trade agreement between the EU and the US, but given Donald Trump's threats regarding Greenland, it is impossible to ratify the agreement at this stage. The zero-tariff policy on US products must be suspended."
In a tweet, Trump suggested that the new tariffs were a response to European allies deploying troops to Greenland. These countries took this action as the Trump administration considered using U.S. troops as part of its accelerated plans to acquire Danish territory.
In the article, Trump wrote that these eight countries “traveled to Greenland for unknown purposes, which poses an extremely dangerous situation for the security, safety and survival of our planet.”
Previously, Trump had hinted at a possible tariff strategy against Greenland, similar to the methods he had used to force foreign countries to lower drug prices.
Trump said at the White House last Friday, "I may take the same measures against Greenland. If certain countries do not cooperate with Greenland, I may impose tariffs on those countries because we need Greenland to ensure national security."
While the president did not cite specific legal provisions when announcing the latest measures on the Truth Social platform, these actions appear to follow the precedent of his controversial International Emergency Economic Powers Act—which grants the president broad powers in the face of “extraordinary and exceptional threats.”
The Supreme Court may rule as early as this week on whether to overturn the tariffs imposed under the law, a move that could immediately jeopardize a new round of aid and would effectively be a blatant challenge to the judiciary's intervention in a new round of trade war.
Scott Lincicome, a trade policy scholar at the Cato Institute, warned last Saturday that the new threat exposes the vulnerability of relying on unilateral agreements rather than binding treaties.
In a statement, Lincicome said: “Trump’s tariff announcement confirms that…his trade agreements can be changed at will and are unlikely to curb his daily tariff impulses. Today’s threats highlight the hollow rationale behind Trump’s so-called emergency tariffs, which expose the economic and geopolitical problems caused by unchecked executive power.”
European countries have issued statements condemning the tariffs, characterizing them as a hostile act against close military allies and stating that they undermine the foundation of the transatlantic partnership.
European Commission President Ursula von der Leyen, the key figure in the group's trade policy, strongly rejected the White House's ultimatum, saying that the tariffs were not just trade disputes, but a test of Western values.
Shortly after the announcement, Ursula von der Leyen posted on Bluesky, "We choose to pair and cooperate, we choose our businesses, we choose our people."
Coincidentally, Danish Prime Minister Mette Frederiksen told MS Now Saturday that Trump's move surprised her, and mentioned her recent "constructive meeting" with the US Vice President.
Frederickson refuted Trump’s claims about the troop movements, saying the increase was purely to “enhance security” in the Arctic, which is “no longer a low-tension area,” and was being carried out with “complete transparency” with U.S. allies.
Other European leaders have taken a similarly firm stance. European Council President António Costa said last Saturday that the EU is "coordinating a joint response" to the threat.
"The EU will stand firm in upholding international law, no matter when or where," Portuguese Prime Minister Costa said at a press conference in Paraguay last Saturday. This statement came after the EU signed a trade agreement with a South American country.
French President Emmanuel Macron also commented on the matter, posting on social media platform X: "No intimidation or threats will shake us." Macron warned that "the forces of stability have awakened" and vowed that France will stand firmly with its neighbors.
Swedish Prime Minister Ulf Christensen strongly rejected Trump's tariff threats. He stated on the X platform, "We will not tolerate any form of blackmail," and emphasized that "only Denmark and Greenland have the right to decide matters concerning Denmark and Greenland."
Trump's latest move has put even more pressure on NATO, a military alliance with 32 member states. The cornerstone of this alliance is the principle of "collective defense"—an attack on any member is considered an attack on all members.
European leaders have warned that any U.S. attempt to seize Greenland by force could lead to the end of NATO.
Trump's announcement of additional tariffs may mean he is abandoning his ambition to use military action to achieve his long-term occupation of the island, but it will still increase pressure on Denmark and other European countries that have made it clear that Greenland is "not for sale."
Some have warned European leaders against rushing to respond to Trump’s tariff threats.
"We can simply ignore it and wait and see," said Carsten Brzeski, global head of macro research at ING Research. "Europe has indicated that it will not accept it entirely, so the current tariff policy is actually an improvement compared to the threat of military invasion."
Amid continued pressure from the White House, bipartisan delegations to Copenhagen publicly refuted Trump's claims. Senator Chris Konst (a Democrat from Las Vegas) told reporters Saturday morning, "There is no imminent security threat to Greenland."
Koons, along with Senator Lisa Murkowski and Senator Chris Koons, stated that the visit, led by Alaska Republican Dan Sullivan, aimed to "rebuild trust with Greenland."
The two senators refuted Trump's description of the European troop movements as "thwarting a U.S. plot to acquire the island," instead praising the deployments as efforts by NATO partners to "strengthen defense."
Murkowski emphasized that despite the president's attack, cross-team support for Denmark remains strong. She stated, "We cannot allow this to turn into a team fight; support for friends and allies... should not be like this."
Similarly, Democratic Senator Jeanne Shaheen (New Hampshire) and Republican Senator Tom Tillis (North Carolina), who are members of the bipartisan Senate NATO Observer Group, also warned that threatening to impose tariffs on NATO would raise the cost of living for American families.
In a joint statement, lawmakers said: “Continuing down this path is bad for the United States, bad for American businesses, and bad for America’s allies… These tariffs will drive up spending for families and businesses at a time when many Americans are already worried about the cost of living.”
Lawmakers said Danish and Greenland officials wanted to “build a partnership with the United States” and urged the U.S. government to “stop the threats and start diplomacy.”
The US plan to impose substantial tariffs on eight NATO allies and its threat to acquire Greenland is essentially a sudden geopolitical and trade risk event. It creates a theoretically favorable environment for gold prices by stimulating safe-haven demand and inflation concerns.
However, the extent of its ultimate impact will depend on whether the threat is translated into actual policy and on countermeasures from Europe and other countries.
(Spot gold daily chart, source: FX678)
At 9:42 AM Beijing time, spot gold is trading at $457.82 per ounce.
Trump posted on his social media platform that tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will take effect on February 1 at a rate of 10%, and will soar to 25% on June 1.
The newly imposed punitive tariffs are expected to be implemented in conjunction with existing U.S. tariffs, which were originally levied on goods from the aforementioned countries.
This sudden geopolitical risk provided strong support for gold prices. On Monday (January 19) during the Asian session, spot gold fluctuated upwards, with an intraday increase of about 1.4%, and is currently trading around $4,660 per ounce, after previously touching a record high of $4,690.46 per ounce.
The United States currently imposes an average tariff of approximately 15% on goods from its allies. Goods from EU countries, which are of particular interest to Trump, are subject to higher tariffs. Imports from the UK are subject to an average tariff of approximately 10%, with specific rates varying by industry. In some sectors, particularly metals and certain automobiles, combined tariffs have pushed the actual tariff rate to the mid-range of 15% to 25%.
The EU, comprised of 27 member states, reportedly faces a threat if tariffs are imposed on one or more of its member states, meaning the new tariffs will apply to all member states. Trump's demands now threaten the EU-US trade agreement reached in August.
Manfred Weber, a senior member of the European Parliament, said a trade agreement between the EU and the US is "impossible at this stage." He posted on social media platform X: "The European People's Party supports a trade agreement between the EU and the US, but given Donald Trump's threats regarding Greenland, it is impossible to ratify the agreement at this stage. The zero-tariff policy on US products must be suspended."
Tariff strategy
In a tweet, Trump suggested that the new tariffs were a response to European allies deploying troops to Greenland. These countries took this action as the Trump administration considered using U.S. troops as part of its accelerated plans to acquire Danish territory.
In the article, Trump wrote that these eight countries “traveled to Greenland for unknown purposes, which poses an extremely dangerous situation for the security, safety and survival of our planet.”
Previously, Trump had hinted at a possible tariff strategy against Greenland, similar to the methods he had used to force foreign countries to lower drug prices.
Trump said at the White House last Friday, "I may take the same measures against Greenland. If certain countries do not cooperate with Greenland, I may impose tariffs on those countries because we need Greenland to ensure national security."
While the president did not cite specific legal provisions when announcing the latest measures on the Truth Social platform, these actions appear to follow the precedent of his controversial International Emergency Economic Powers Act—which grants the president broad powers in the face of “extraordinary and exceptional threats.”
The Supreme Court may rule as early as this week on whether to overturn the tariffs imposed under the law, a move that could immediately jeopardize a new round of aid and would effectively be a blatant challenge to the judiciary's intervention in a new round of trade war.
Scott Lincicome, a trade policy scholar at the Cato Institute, warned last Saturday that the new threat exposes the vulnerability of relying on unilateral agreements rather than binding treaties.
In a statement, Lincicome said: “Trump’s tariff announcement confirms that…his trade agreements can be changed at will and are unlikely to curb his daily tariff impulses. Today’s threats highlight the hollow rationale behind Trump’s so-called emergency tariffs, which expose the economic and geopolitical problems caused by unchecked executive power.”
Europe responds
European countries have issued statements condemning the tariffs, characterizing them as a hostile act against close military allies and stating that they undermine the foundation of the transatlantic partnership.
European Commission President Ursula von der Leyen, the key figure in the group's trade policy, strongly rejected the White House's ultimatum, saying that the tariffs were not just trade disputes, but a test of Western values.
Shortly after the announcement, Ursula von der Leyen posted on Bluesky, "We choose to pair and cooperate, we choose our businesses, we choose our people."
Coincidentally, Danish Prime Minister Mette Frederiksen told MS Now Saturday that Trump's move surprised her, and mentioned her recent "constructive meeting" with the US Vice President.
Frederickson refuted Trump’s claims about the troop movements, saying the increase was purely to “enhance security” in the Arctic, which is “no longer a low-tension area,” and was being carried out with “complete transparency” with U.S. allies.
Other European leaders have taken a similarly firm stance. European Council President António Costa said last Saturday that the EU is "coordinating a joint response" to the threat.
"The EU will stand firm in upholding international law, no matter when or where," Portuguese Prime Minister Costa said at a press conference in Paraguay last Saturday. This statement came after the EU signed a trade agreement with a South American country.
French President Emmanuel Macron also commented on the matter, posting on social media platform X: "No intimidation or threats will shake us." Macron warned that "the forces of stability have awakened" and vowed that France will stand firmly with its neighbors.
Swedish Prime Minister Ulf Christensen strongly rejected Trump's tariff threats. He stated on the X platform, "We will not tolerate any form of blackmail," and emphasized that "only Denmark and Greenland have the right to decide matters concerning Denmark and Greenland."
NATO pressure and legal wrangling
Trump's latest move has put even more pressure on NATO, a military alliance with 32 member states. The cornerstone of this alliance is the principle of "collective defense"—an attack on any member is considered an attack on all members.
European leaders have warned that any U.S. attempt to seize Greenland by force could lead to the end of NATO.
Trump's announcement of additional tariffs may mean he is abandoning his ambition to use military action to achieve his long-term occupation of the island, but it will still increase pressure on Denmark and other European countries that have made it clear that Greenland is "not for sale."
Some have warned European leaders against rushing to respond to Trump’s tariff threats.
"We can simply ignore it and wait and see," said Carsten Brzeski, global head of macro research at ING Research. "Europe has indicated that it will not accept it entirely, so the current tariff policy is actually an improvement compared to the threat of military invasion."
Lawmakers call for de-escalation
Amid continued pressure from the White House, bipartisan delegations to Copenhagen publicly refuted Trump's claims. Senator Chris Konst (a Democrat from Las Vegas) told reporters Saturday morning, "There is no imminent security threat to Greenland."
Koons, along with Senator Lisa Murkowski and Senator Chris Koons, stated that the visit, led by Alaska Republican Dan Sullivan, aimed to "rebuild trust with Greenland."
The two senators refuted Trump's description of the European troop movements as "thwarting a U.S. plot to acquire the island," instead praising the deployments as efforts by NATO partners to "strengthen defense."
Murkowski emphasized that despite the president's attack, cross-team support for Denmark remains strong. She stated, "We cannot allow this to turn into a team fight; support for friends and allies... should not be like this."
Similarly, Democratic Senator Jeanne Shaheen (New Hampshire) and Republican Senator Tom Tillis (North Carolina), who are members of the bipartisan Senate NATO Observer Group, also warned that threatening to impose tariffs on NATO would raise the cost of living for American families.
In a joint statement, lawmakers said: “Continuing down this path is bad for the United States, bad for American businesses, and bad for America’s allies… These tariffs will drive up spending for families and businesses at a time when many Americans are already worried about the cost of living.”
Lawmakers said Danish and Greenland officials wanted to “build a partnership with the United States” and urged the U.S. government to “stop the threats and start diplomacy.”
Impact on the gold market
The US plan to impose substantial tariffs on eight NATO allies and its threat to acquire Greenland is essentially a sudden geopolitical and trade risk event. It creates a theoretically favorable environment for gold prices by stimulating safe-haven demand and inflation concerns.
However, the extent of its ultimate impact will depend on whether the threat is translated into actual policy and on countermeasures from Europe and other countries.
(Spot gold daily chart, source: FX678)
At 9:42 AM Beijing time, spot gold is trading at $457.82 per ounce.
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