US President Donald Trump has escalated tensions with several Nordic countries by threatening to impose tariffs amid a contentious dispute over Greenland. In a new twist, Trump is now trying to pressure Denmark—and seven other countries—to pay more. He argues that they are all doing an insufficient job of protecting their own territory from possible future incursion by China and Russia.
In a series of statements, Trump emphasized his concerns about Denmark’s ability to safeguard Greenland, a territory that has garnered attention due to its strategic location and natural resources. He announced, “Denmark can’t protect Greenland from China and Russia.” For many, this strong statement forebodes his administration’s continued geopolitical strategy in the Arctic region.
Trump’s comments went beyond the impersonal when he posted on Facebook expressing his outrage. He was disappointed at not receiving last year’s Nobel Peace Prize awarded by Norway. He announced, “Now I don’t have to care about peace anymore.” This pledge indicates a dramatic change in direction with respect to putting American interests before global diplomacy. This dovish sentiment betrays a hawkish turn in international affairs. At the same time, the President seems to be preparing to impose tariffs with potentially disastrous fallout.
The planned retaliatory tariffs would affect Denmark and seven other European countries at a 10 percent rate. As of now, these tariffs go into effect February 1st. Things are only about to get worse, as these tariffs are scheduled to double to 25% by June. This senseless increase is consistent with Trump’s overall trade strategy. His plan is to apply economic pressure to those countries that he feels are failing to benefit the US sufficiently.
The eight countries warned by this tariff threat—around 300% on average—are Denmark, Finland, Iceland, Norway and Sweden, comprising the majority of the Nordic region. The President’s erratic actions have certainly raised alarms among economists and trade experts. In doing so, they caution that these measures could spark retaliation and further undermine diplomacy.
Analysts say this latest tariff push is bigger than Greenland. They say it shows a much larger frustration that runs against longstanding U.S. alliances and multilateral deals. Trump has long railed against the disproportionate burden-sharing amongst NATO allies. He’s in tune with the administration’s view that our international partners need to start carrying more of the burden. The tariffs could be the opening salvo of a useful new chapter in US-Nordic relations. Yet this chapter promises to be the most controversial and deal-focused.
The one we are watching most of all is the US economic calendar wrangling. It has a wealth of other key indicators, such as GDP growth and PCE inflation data. In addition to creating more equitable opportunities, these economic metrics should inform the administration’s trade policymaking process to set a productive agenda for future tariffs. Investors and policymakers alike will be watching for any signals that might indicate how these tariffs could impact economic stability both domestically and internationally.