The dollar dropped, and U.S. stocks opened lower on Tuesday, following Donald Trump’s announcement about a meeting in Davos regarding the Greenland situation.
The U.S. currency fell 0.8% against the euro, while the S&P 500 slid 1.3%. The Nasdaq Composite index diminished by 1.5%. European stocks also faced a downturn, with the Stoxx Europe 600 closing 0.7% down.
Trump shared on his Truth Social platform that he would meet various parties in Davos, Switzerland, during the World Economic Forum. Despite a “very good” call with NATO’s Secretary-General, he insisted there would be “no going back” on his Greenland plans.
He even shared an AI-generated image featuring himself, Vice President JD Vance, and Secretary of State Marco Rubio in Greenland, boldly marked as “US territory EST 2026.”
In response, Denmark bolstered its presence in Greenland, sending additional troops alongside the over 200 already stationed there. Prime Minister Mette Frederiksen emphasized the need for Denmark to stay strong despite the pressure from their closest ally, the U.S.
Trump’s mention of imposing 10% tariffs on eight European nations that recently sent military personnel to Greenland has raised concerns about a potential trade war. European Commission President Ursula von der Leyen stated that the EU would respond “unflinchingly” to U.S. pressure, hinting at a re-evaluation of the recent U.S.-EU trade agreement.
Belgian Prime Minister Bart De Wever criticized the idea of appeasing Trump, calling for a more assertive stance from Europe. He remarked, “Living as a happy vassal is one thing; existing as a miserable slave is another.”
At the same time, U.S. Treasury Secretary Scott Bessent urged other nations to remain calm and avoid escalating tensions with the U.S., reaffirming America’s commitment to NATO and its allies in Europe.
In the mix, Trump criticized the UK for transferring ownership of the Chagos Islands to Mauritius, arguing it highlighted the importance of acquiring Greenland for national security. French President Emmanuel Macron also questioned Trump’s motivations, questioning, “I do not understand what you are doing on Greenland.”
This situation illustrates how international relations can quickly shift, especially with strong personalities at the helm. As the world watches, it’s crucial to consider how such conflicts impact global markets and political alliances.
