The story of US and EU tariffs is no longer a trade dispute. It is a demonstrative escalation, where the economy is used as a lever of pressure in a geopolitical game.
Trump is effectively issuing an ultimatum: either Europe agrees to a deal on Greenland, or starting February 1, it faces 10% tariffs, rising to 25% by summer. The reason is secondary. The essence is in the signal. Trade is directly linked to issues of security and sovereignty. And this breaks the entire familiar structure of transatlantic relations.
The EU's reaction is indicative. Formally - negotiations, diplomacy, emergency summits. In fact - preparation for a counter-strike. Tariffs on €93 billion worth of American goods are already on the table. Boeing airplanes, cars, bourbon. And this is not a bluff: measures have already been approved earlier, just put on pause. Now they can be activated in a matter of days.
The key point is an anti-coercive tool. This is the heavy artillery of the EU, which has never been used. It was created specifically for such scenarios: when trade is used as a means of political coercion. If activated, it will not only be about tariffs. Taxes on American tech companies, investment restrictions, and closing access to government contracts are possible. This is no longer a 'counter'. This is a systemic conflict.
It is important to understand the scale. The EU is the largest source of imports to the USA. Over 20% of all American imported goods. Any rupture here hits both sides. According to Bloomberg Economics, with 25% tariffs, exports from the affected countries to the USA could fall by up to 50%. Germany, Denmark, Sweden are under maximum pressure.
And all this is happening against the backdrop of a rally in European markets. Money has just started to flow into Europe: defense, industry, banks, chip equipment. The German fiscal turnaround, lowering interest rates, hopes for profit growth. A tariff war at this moment is the perfect way to undermine stability.
The American position is extremely cynical and therefore dangerous. 'Europe projects weakness, the USA - strength.' This is not negotiation. This is a test of strength. And if the EU backs down now, it will lose not only trade positions but also political subjectivity.
The most alarming thing here is not even the tariffs. But the precedent. If trade duties become a tool for coercing NATO allies, it means the rules no longer apply. And when the rules no longer apply, the market starts to price in chaos.
This is not a story about Greenland. This is a story about how quickly the world can shift from 'economic partnership' to open economic pressure. And for the markets, this is a much more serious risk than any inflation report.