Greenland tariffs weigh on the euro, demand for defensive stocks

Global markets experienced increased volatility after US President Donald Trump announced the introduction of 10 percent tariffs on goods from eight European countries, including Germany, France, and the United Kingdom. The tariffs are to take effect on February 1 and will increase to 25 percent in June unless the US receives approval to purchase Greenland.

The joint response of European countries supported Greenland, and Ireland warned that the European Union is prepared to take retaliatory measures. Investors reacted nervously—the euro weakened and interest in safe assets, especially gold, increased.

The German DAX and British FTSE recorded growth of more than three percent, but geopolitical tensions may slow this trend. Shares in defense companies, which are profiting from the tense situation, have strengthened significantly.

According to analysts, this new trade conflict could disrupt recent agreements and lead to broader economic risk. Markets are reacting cautiously for now, but sentiment could change if the tariffs come into effect.

Trump's threats come at a time when the European Union is seeking to expand trade relations, including the recently signed agreement with the Mercosur bloc.

(reuters, max)