President #TRUMP threatened 10% tariffs on exports from Denmark, Sweden, Norway, Germany, UK, Netherlands, and Finland starting February 1, 2026, escalating to 25% by June unless Greenland sale is agreed—linked to his Nobel snub frustration. EU Parliament froze US trade deal ratification (15% tariffs suspended), mulling €93-108B retaliation on US goods.
European Response
EU emergency summit planned Thursday; IMF urges unity amid "get your act together" warning. France eyes 200% champagne tariff response; exporters (Norway autos, German goods) exposed, but EU GDP hit milder (0.3-0.5%) vs. US (0.7%).
Market Analysis
Tariffs shave 0.1% off euro area GDP; US demand suppression favors EU competitiveness, potential $8T US asset sales by Europe strengthening euro. Bruegel models: EU exports drop 0.6-1.1%, US 8-66%; regional vulnerability high in manufacturing hubs. Markets alert, no deal risks trade war escalation.
Economic Impact Chart
Projected GDP declines under tariff scenarios highlight limited EU exposure compared to US.