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Good morning from Brussels. Officials and diplomats in this city are still reeling this morning after US President Donald Trump threatened to slap an extra 10% tariff on eight European countries — including Denmark, Germany and France — next month, rising to 25% in June, unless Greenland’s sale to the US is agreed.
Financial markets are also reacting this morning, with stocks in Asia sliding when trading resumed in the early hours.
The European Union is now weighing its response. The European Commission presented member states with a range of options during an urgent meeting on Sunday, sources familiar with the talks told Euronews, including reviving a retaliation package worth €93 billion in US tariffs. EU leaders will gather in Brussels later this week for an emergency summit convened last night by European Council President António Costa. We lead this morning with our top story on how Sunday’s talks played out.
This is more than just another of Trump’s tariff threats: the move is likely to torpedo the EU-US trade deal agreed last year and is throwing transatlantic ties into disarray at a time of mounting global instability.
Reminder: The eight countries targeted by Trump sent a few dozen reconnaissance troops to the Danish autonomous territory of Greenland last week. Those countries said in a joint statement yesterday that Trump’s backlash risks “a dangerous downward spiral”.
Responses by other leaders have also been unequivocally firm, with a flurry of diplomatic activity taking place over the weekend, including calls between the US President and the leaders of Italy, the UK and the NATO alliance.
Trump’s threats have effectively put last year’s EU-US trade deal – which set a baseline tariff of 15% on most EU products to avoid even higher tariffs threatened by Trump – on ice. The leaders of all three centrist political groups in the European Parliament – the European People’s Party (EPP), The Socialists and the liberals of Renew Europe – have said that they will completely halt the ratification of the deal, which would have slashed tariffs on American industrial goods, until Trump changes course.
The parliament ironically finds itself now holding the political cards, despite having decried its lack of a say on the trade truce in the past.
Brando Benifei, the head of the European Parliament’s EU-US delegation, told my colleague Vincenzo Genovese that transatlantic ties are now under “extreme tension”, adding that the crisis raises questions about “the future of Europe”. “European integration, including on foreign policy, defence and security, should take a leap forward as quickly as possible,” he said.
With the EU-US trade truce now effectively frozen, there are also major questions this morning about the ability of Ukraine’s European allies to convince Trump to rally around Zelenskyy and commit to security guarantees for the war-torn country when leaders gather for the World Economic Forum in the Swiss Alps this week. The trade deal was initially sold by EU leaders as necessary to stabilise transatlantic ties and keep Trump on side on Ukraine. We preview the week in Davos below.
It’s also possible that market turmoil and investor fears could spook Trump and force him to row back, as he did on his Liberation Day tariffs in April last year. Eurozone investors are estimated to hold a disproportionately high amount of €6 trillion in US dollar bonds. It means if stress in the transatlantic relationship is felt in the US Treasury market, we could see a similar reversal.
US Treasury Secretary Scott Bessent defended Trump’s announcement in an interview on NBC news last night, saying the US President is “able to use the economic might of the US to avoid a hot war.”
EU holds off immediate retaliation, seeks dialogue with US over Greenland
The European Union backed off from triggering a trade ‘bazooka’ in retaliation for US President Donald Trump’s tariff threats over Greenland during an urgent meeting in Brussels on Sunday, people familiar with the talks told Euronews, prioritising a “diplomatic solution” with the US instead.
The ‘bazooka’, formally known as the Anti-Coercion Instrument (ACI), is a powerful tool adopted in 2023 to allow the EU to punish unfriendly states for economic coercion by restricting third countries from participating in public procurement tenders, limiting trade licenses and shutting off access to the single market.
It has never been used by the EU, but Trump’s threats to use tariffs to force the sale of Greenland to the US prompted calls, including from the French President, for the instrument to be deployed. Our trade reporter Peggy Corlin has more.
The EU could however revive a “retaliation package” worth €93 billion in tariffs on US products if Trump follows through on his threat to slap the additional 10% tariff on eight European countries on 1 February, the sources added.
The package, currently suspended until 7 February as part of a transatlantic trade truce, would include levies of up to 30% on a range of US products from cars to poultry.
Our EU editor Maria Tadeo and I have the details.
Kyiv and its allies hope to engage Trump in Davos despite Greenland fallout
World leaders and top business executives gather for the World Economic Forum in the Alpine Ski Resort of Davos this morning, with this year’s forum themed “a spirit of dialogue.”
But that theme looks increasingly detached from reality. The US President, expected at the forum later this week, has been embracing a different philosophy in recent weeks, withdrawing from international organisations, upending the global order with his advances on Venezuela and Greenland and again using tariffs to escalate trade tensions with partners worldwide.
Trump is one of dozens of world leaders expected to attend, along with five other G7 leaders and Ukrainian President Volodymyr Zelenskyy.
Our Ukraine correspondent Sasha Vakulina, on the ground in Davos, reports that together with its Western allies, Kyiv is hoping that the forum can be a platform for the US President to formalise his commitments to Ukraine’s security guarantees and deter Russia from further attacks – despite a deepening rift between Europe and the US over Greenland.
Davos is a symbolic place for Ukraine’s peace efforts. It was the 2024 World Economic Forum when over 80 delegations took part in the “peace formula” meeting at the level of national security advisors. The formula and the peace plans have changed since, but both Kyiv and Washington have been stating recently that peace in Ukraine can be closer than ever.
Amid its diplomatic efforts, Switzerland also offered to grant immunity to Vladimir Putin earlier this year if Russia’s President would agree to have a meeting with Zelenskyy. The Swiss Foreign Ministry said the country wouldn’t arrest Putin despite the International Criminal Courts’s warrant if the meeting would bring an end to Russia’s war in Ukraine. Putin rejected the meeting proposal.
Centre-left candidate to face far-right rival in Portuguese presidential runoff
In one of the closest contests in recent decades, Socialist candidate António José Seguro won most votes in the first round of Portugal’s presidential election on Sunday, but far-right candidate André Ventura clinched enough votes to secure a place in the runoff set for 8 February.
A presidential race in the country has only once required a runoff since the fall of the dictatorship in 1974, in another signal of a dramatic shift in the political landscape. The two-party dominance has recently been challenged by Ventura’s Chega (Enough) party, which became the main opposition following a snap parliamentary election.
Ventura captured 24% of yesterday’s vote, placing him second behind Seguro who led with almost 31%. It was the best result for a Socialist candidate since Jorge Sampaio in 2001, who at the time obtained 2,411,453 votes (55.76%).
Seguro will now have the arduous task of increasing his vote in a political environment marked by the decline in the weight of the left.
Joana Mourão Carvalho has the full story.
More from our newsrooms
At least 39 killed after Spanish high-speed trains collide in Cordoba. The death toll continues to rise this morning after a train with 300 passengers on board derailed and crossed into the adjacent track, colliding with another train in southern Spain on Sunday evening. Our Madrid bureau has more.
Fact check: Is Ursula von der Leyen ‘auto-increasing’ her own salary? Claims are circulating on social media that European Commission President Ursula von der Leyen has been “automatically increasing” her own salary. Euronews’ Noa Schumann breaks downthe facts.
We’re also keeping an eye on
- The European Parliament’s plenary session kicks off later today in Strasbourg.
That’s it for today. Maria Tadeo, Jorge Liboreiro, Peggy Corlin, Vincenzo Genovese and Sasha Vakulina contributed to this newsletter. Remember to sign up to receive Europe Today in your inbox every weekday morning at 08.30.
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