US President Donald Trump has escalated tensions with Europe by imposing tariffs on eight NATO allies over the Greenland dispute, raising concerns about global markets, precious metals, and India-EU trade relations.
Trump Imposes 10% Tariffs on NATO Allies
Donald Trump announced that the United States would impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting February 1, rising to 25% from June 1 if a deal for the purchase of Greenland is not reached.
Trump justified the move by stating that US control of Greenland is essential for national security and to prevent Russia and China from expanding influence in the Arctic, according to Bloomberg.
European Backlash Intensifies
The announcement was met with strong criticism from European nations. The European Union voiced full support for Denmark, warning that tariffs against NATO allies could spark a serious deterioration in transatlantic relations.
French President Emmanuel Macron described the threats as “unacceptable,” while Swedish Prime Minister Ulf Kristersson said his country would not be “blackmailed.” UK Prime Minister Keir Starmer called the use of tariffs against allies “completely wrong” and pledged to raise the issue directly with Washington. EU officials are also exploring potential countermeasures, including suspending the US-EU trade truce signed last year.
Impact on Gold and Silver Markets
Analysts predict that Trump’s Greenland tariffs will have an immediate effect on global precious metals markets. According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, the tariffs may weaken the US dollar, making gold and silver more attractive as safe-haven assets.
Anuj Gupta, a SEBI-registered commodity expert, expects gold and silver prices to open higher on Monday, with gold facing resistance at $4,650 per ounce and silver at $93 per ounce. Rising geopolitical uncertainty and trade tensions are likely to increase demand for these metals in both international and domestic markets.
Implications for the Indian Stock Market
While global uncertainty may create short-term volatility in India’s stock market, many experts see a positive long-term outlook. Sectors likely to experience fluctuations include pharmaceuticals, textiles, gems and jewellery, steel, metals, automobiles, solar equipment, and leather.
However, the ongoing India-EU Free Trade Agreement (FTA) negotiations could benefit significantly. Experts say Trump’s tariff threats may accelerate FTA discussions, potentially finalizing the deal sooner.
According to Sandeep Pandey, Co-founder of Basav Capital, the India-EU FTA would bolster the Indian economy, particularly in sectors like textiles, steel, and automobiles, mitigating short-term market disruptions.
Greenland Dispute and NATO Tensions
The Greenland dispute has intensified following Denmark’s invitation to NATO allies for training and security activities in the Arctic territory.
Trump considers these deployments provocative, arguing that the US must own Greenland outright to secure strategic dominance and support future missile defense projects, including the proposed “Golden Dome” system.
European officials have maintained that Greenland’s status cannot be changed through economic pressure and that international law cannot be rewritten with tariffs. This standoff is being seen as a major test for NATO unity, US-EU trade relations, and Arctic geopolitics.
Trump’s Greenland tariffs have triggered a ripple effect across markets and geopolitics, impacting precious metals, the Indian stock market, and India-EU trade negotiations.
While gold and silver are expected to benefit in the short term as safe-haven assets, the Indian stock market may see temporary volatility.
In the long term, the India-EU FTA deal could strengthen trade and boost sectors like textiles, automobiles, and metals, turning this geopolitical challenge into a potential economic opportunity.
Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
