Gold and silver reached record highs on 18 January 2026, while global stock markets declined sharply following US President Donald Trump's announcement of tariffs on several European countries. The threats stem from disagreements over the US's push to acquire Greenland, a Danish autonomous territory. Trump stated that 10 percent tariffs would apply to Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting 1 February 2026, escalating to 25 percent from 1 June 2026 if no agreement is reached.

Equity markets reacted negatively, with Paris and Frankfurt opening over one percent lower, and London also posting significant losses. Asian markets like Tokyo, Hong Kong, and Sydney fell, though Shanghai, Seoul, Taipei, and Bangkok saw gains. US futures dropped, and the dollar weakened against the euro, sterling, and yen.

Background and Implications of Rising Tensions

The US-EU trade fears build on existing geopolitical strains, including Trump's recent threats against Iran and the US ouster of Venezuelan President Nicolas Maduro. These developments have boosted safe-haven assets, with gold peaking at $4,690.59 and silver at $94.12. Analysts warn that the tariffs could jeopardize a US-EU trade deal signed in 2025.

Charu Chanana, chief investment strategist at Saxo Markets, noted: "The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter." She added that even negotiated reductions might increase structural risks like politicised trade and higher policy uncertainty for businesses.

Separately, China's economy grew five percent in 2025, meeting its target but marking one of the slowest rates in decades. Exports drove growth amid subdued domestic consumption, heightening calls for stimulus.

European Officials Push Back Against Threats

European nations issued a joint statement on 17 January 2026, declaring: "Tariff threats undermine transatlantic relations and risk a dangerous downward spiral." German Foreign Minister Johann Wadephul told ARD television that the US-EU trade agreement seems impossible under current conditions. French President Emmanuel Macron's aides indicated plans to invoke the EU's "anti-coercion instrument" if tariffs proceed, potentially restricting US imports into the 450-million-person market. Bloomberg reported discussions among EU member states on retaliatory tariffs targeting €93 billion of US goods. No immediate US response was detailed in available sources.