Political leaders, corporate executives, and policy influencers will meet at the Swiss resort town of Davos. However, the World Economic Forum’s convergence this year could be overshadowed by trade tariff threats from US President Donald Trump on European allies. Over the weekend, Donald Trump said the United States could impose import tariffs on a group of European countries if Greenland negotiations fail to produce an agreement. A 10% tariff would take effect from February on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. The POTUS said the levy would go up to 25% from June 1 should talks over Greenland break down. Trump is slated to address the forum later this week. Organizers have confirmed that the United States is sending Treasury Secretary Scott Bessent, Secretary of State Marco Rubio, and Middle East envoy Steve Witkoff. US tariff threats cause the euro and pound to weaken against the dollar Trump’s tariff threats have reverberated through financial markets, weakening the euro and the British pound against the US dollar in Monday morning’s trading session. Several economists believe the trade conflict could hurt export-heavy economies like the United Kingdom and Germany. EUROSTOXX 50 futures and Germany’s DAX futures both dropped 1.1%, while Japan’s Nikkei index fell 1% in Asia as traders digested the implications of a possible trade showdown. “Hopes that the tariff situation has calmed down for this year have been dashed for now, and we find ourselves in the same situation as last spring,” said Berenberg chief economist Holger Schmieding. In London, ministers said they wanted to avoid a spiral of retaliation to keep the UK’s trade agreements with Washington, reached last year, intact. UK Chancellor Rachel Reeves is scheduled to attend the forum on Tuesday, where she is expected to hold talks with counterparts and business leaders on the sidelines. Italy’s Prime Minister Giorgia Meloni said she had raised her objections directly with the US president and told him tariffs are a “mistake.” “I wanted to tell you that the provision for an increase in tariffs against those nations that have chosen to contribute to Greenland’s security is, in my opinion, a mistake, and obviously, I do not agree with it. I agree with what Donald Trump said a few hours ago, to whom I spoke my mind and heard the NATO Secretary General confirm to me a job that NATO is starting to do from this point of view,” Meloni said. Denmark’s Foreign Minister Lars Lokke Rasmussen, representing the country with sovereignty over Greenland, told the BBC that there was a “fundamental disagreement” with the United States during their talks at the White House last week. Rasmussen said the US president was insisting on “conquering” Greenland, a position his country is vehemently against. “We made it very, very clear that this is not in the interest of Denmark. It’s productive to start discussions at a high level,” he surmised. Other European Union member states have coined the tariff threats “economic blackmail,” with French delegates saying on Sunday that Europe could escalate the tussle if necessary. Liberation day jitters crawl back into European business sentiment Much like Trump’s “Liberation Day” tariffs in April 2025, which also caused a price slump in crypto and global markets, Bitcoin has shed over 2% of its price and dropped back down to $92,900. US markets are closed on Monday for Martin Luther King Jr. Day. However, in early Asian trading, stock futures were down 0.7%, while 10-year futures edged higher by a percentage point. Trump has also insinuated he may intervene in unrest in Iran, which may have compounded investor unease and pushed gold a step closer to its all-time high, now changing hands at $4,670. Some analysts note that markets have adapted to a steady stream of geopolitical shocks, and investors may have learned to discount the most extreme outcomes. “Investor sentiment is that Trump just won’t be able to do all of the things that he talks about, and that won’t move the needle on asset prices,” said Fordham Global Foresight founder Tina Fordham. If you're reading this, you’re already ahead. Stay there with our newsletter .
