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Greenland dispute rekindles US-EU tariff spat

Tensions between Washington and Brussels flared up again at the weekend after US President Donald Trump threatened steep new tariffs on imports from eight European NATO members unless a deal is struck for the “complete and total” purchase of Greenland, prompting the EU to prepare potential retaliatory levies on a large volume of US goods. The renewed tariff spat pushed gold and silver to fresh record highs and weighed on the US dollar, while risk appetite remained fragile across equity markets. US stocks ended last week slightly lower and Asian markets started the week on the back foot, although South Korea outperformed. Trading volumes are likely to be thinner at the beginning of the week with US markets closed on Monday for the Martin Luther King, Jr. Day holiday, while investors’ attention will likely shift towards the comments coming from world leaders at the World Economic Forum in Switzerland.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

The Strategist EU trade
© Shutterstock

Trump warned on Saturday that imports from eight European NATO members will face new US tariffs starting at 10% on 1 February and rising to 25% on 1 June unless an agreement is reached for the “complete and total” purchase of Greenland. The measures, which would apply to Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland and effectively cover the entire European Union due to its common trade policy, risk undermining the recently agreed EU-US trade deal and add to already elevated duties on sensitive sectors such as metals and autos. In response, European Union governments began discussing on Monday the introduction of retaliatory tariffs worth up to USD 107.71 billion on US goods. The US dollar weakened following the tariff announcements, with the US Dollar Index trading down 0.2%. Meanwhile, spot gold traded near USD 4670 an ounce and silver rose 3.8% to trade above USD 94, both reaching new all-time highs.

US inflation and Japanese policy in focus

Looking beyond geopolitics, trading gets off to a slower start this week with US markets closed on Monday for the Martin Luther King, Jr. Day holiday, while the World Economic Forum in Switzerland runs all week, keeping investors’ attention on the global economic and policy outlook. Focus in the US centres on Thursday’s third-quarter gross domestic product figures and Personal Consumption Expenditures for November, alongside initial jobless claims, also due on Thursday. Toward the end of the week, purchasing managers’ indices (PMI) provide an updated picture of business activity across major developed economies, with France, Germany, the UK, and the US all due on Friday. In Japan, the Bank of Japan’s interest rate decision on Friday comes on the same day as fresh national inflation figures, offering further insight into the central bank’s thinking on the path of monetary policy. On the corporate side, fourth-quarter earnings season continues this week with several industry leaders reporting, including Netflix (Tuesday), Intel (Thursday), Procter & Gamble (Thursday) and KLA (Thursday).

Asian equities slip on tariff fears surrounding Greenland

Most Asian stock markets traded lower on Monday after the Greenland spat rekindled global trade worries, although South Korea outperformed. Japan’s Nikkei 225 fell 0.6%, Hong Kong’s Hang Seng Index was down 1.1% and Australia’s S&P/ASX 200 was 0.3% weaker, while India’s Nifty 50 was 0.7% lower. Chinese indices were little changed, with the Shanghai Shenzhen CSI 300 and Shanghai Composite moving in a narrow range after data showed fourth-quarter GDP grew 4.5% year-on-year, taking full-year growth to 5% and meeting Beijing’s target, though December figures pointed to ongoing weakness in fixed-asset investment and retail sales despite firm exports and policy support. South Korea’s Kospi bucked the regional trend, rising 1.3% to a record high on strong gains in Hyundai Motor, which jumped over 12% amid optimism around its artificial intelligence and robotics strategy and potential partnerships, while chipmakers SK Hynix and Samsung Electronics also advanced against a backdrop of sector news and recent robust earnings from industry leader TSMC.

US equities end week slightly lower

US stocks finished little changed on Friday, as uncertainty rose after Trump signalled reluctance to back the widely expected nomination of Kevin Hassett as successor to Federal Reserve Chair Jerome Powell, despite stronger-than-forecast US industrial production in December. The Dow Jones Industrial slipped 0.2% to 49,359.33 points, resulting in a weekly loss of 0.3%, while the S&P 500 and the technology-heavy Nasdaq 100 both edged down 0.1%, with the latter losing nearly 1% over the week. Construction and real estate shares outperformed, whereas utilities lagged.

German inflation stable at 2.2% in 2025

Consumer prices in Germany rose by 2.2% on average in 2025 compared with 2024, matching the previous year’s inflation rate, according to data confirmed on Friday by the Federal Statistical Office. The year-on-year inflation rate eased to 1.8% in December, down from 2.3% in November, with energy prices falling 1.3% and food prices rising only 0.8% compared with December 2024. Core inflation excluding food and energy stood at 2.8% on an annual average basis in 2025, while service prices increased by 3.5%, driven by sharp rises in combined passenger transport, social services and insurance. The Euro Stoxx 50 dipped 0.2%, while Germany’s DAX, France’s CAC 40 and the Swiss Market Index fell 0.2%, 0.7% and 0.5%, respectively.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: US holiday – Martin Luther King, Jr. Day (all day), German Bundesbank monthly report (12:00) and Canadian Consumer Price Index (14:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.