Trump levels latest threat at Europe as Supreme Court decision on his tariff looms
A Greenlandic flag and the U.S. Consulate Nuuk sign is seen during a protest against President Donald Trump and his announced intent to acquire Greenland on Saturday in Nuuk, Greenland.
President Donald Trump said he would slap 10% tariffs on imports from eight European countries beginning next month, as he ramps up a pressure campaign on Denmark to sell Greenland to the U.S.
Denmark, which has sovereignty over Greenland, will be hit with the 10% levy on the goods it sells to the U.S. starting Feb. 1, Trump said in a lengthy post on his social-media network. Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will also face 10% tariffs, Trump wrote, and threatened an even higher levy. He said all those countries would be subject to 25% tariffs on June 1 "until such time as a Deal is reached for the Complete and Total purchase of Greenland."
The countries are NATO members and have sided with Denmark over its refusal to sell Greenland to the U.S.
The first market effects are likely to be felt in Europe itself, as U.S. stock SPX and bond BX:TMUBMUSD10Y markets will be closed on Monday in honor of the late civil-rights leader Martin Luther King Jr.
Trump's tariffs have roiled U.S. markets, most notably last spring after he announced his so-called "liberation day" tariffs. Yet U.S. equities staged a remarkable comeback following a massive dip in April, with the S&P 500 index up 16% since Inauguration Day.
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Will this latest threat be different?
"I think the markets will brush it off as political noise and gesturing," said Richard Steinberg, chief market strategist of Focus Partners Wealth, in an interview Saturday. "I don't see a scenario where the market thinks we are buying Greenland."
Trump's move on Saturday has others worried that the president is stirring market anxieties anew.
"To all those who said that investment-stifling tariff uncertainty would wane this year: it's maybe time to revise your projections," wrote Scott Lincicome, a trade expert at the Cato Institute, in a message on X.
Trump leveled his latest threat as the Supreme Court is weighing the legality of his use of the International Emergency Economic Powers Act of 1977 to justify his many country-specific tariffs. Lower courts have found that the president exceeded his authority in using the law, and opponents have said that the statute doesn't mention tariffs in its text.
The court may rule as soon as Tuesday, the next day opinions could be released. Yet it has in the past saved major rulings until the summertime.
Investors have been anxious for the Supreme Court's ruling on the IEEPA tariffs. That's not only kept investors on edge, but the S&P 500 index, Dow Jones Industrial Average DJIA and Nasdaq Composite Index COMP all booked modest weekly losses Friday.
Although, in a now more familiar pattern since Trump's second term in office, the $30 trillion Treasury market sold off, instead of rallying on haven buying Friday when Trump hinted at imposing tariffs on countries that oppose his plans to control Greenland. His post Saturday was a follow-through on that threat.
The 10-year Treasury yield jumped 7 basis points Friday to 4.23%, lifting the benchmark rate to its 200-day moving average, according to FactSet. That could signal that bond yields will push higher, keeping rates on new consumer loans, mortgages and corporate financings elevated.
"The market is going to be focused on the Supreme Court decision," Steinberg said. "That's what the markets are completely focused on."
Should the court rule against Trump, his power to impose tariffs like these could be squelched. Treasury Secretary Scott Bessent has said the administration could rely on other authorities to collect tariff revenue, but Trump has claimed the U.S. economy would suffer if the IEEPA tariffs are struck down.
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Trump has sought to justify his calls for a U.S. takeover of Greenland by repeatedly claiming that China and Russia have their own designs on the nation, which holds vast untapped reserves of critical minerals. The White House hasn't ruled out taking the territory by force.