US-Europe Trade Tensions Escalate Globally

The European Parliament is planning to suspend approval of a US trade deal agreed upon in July due to escalating tensions between the US and Europe, particularly over Donald Trump's threat of tariffs on Greenland. This move has rattled financial markets, reviving concerns of a trade war and potential retaliation against the US. Shares on both sides of the Atlantic fell, with European stock markets experiencing a second day of losses and the US Dow Jones, S&P 500, and Nasdaq also dropping. The price of gold rose above $4,800 an ounce, seen as a safer asset in times of uncertainty. The EU had previously announced potential retaliatory measures worth €93bn against American goods, which could come into force on February 7 unless an extension is granted or the new deal is approved. French President Emmanuel Macron and other EU leaders are considering their options, including an anti-coercion instrument nicknamed a 'trade bazooka'. US Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick warned against EU retaliation, stating that the US would respond accordingly.

The article discusses the impact of US President Donald Trump's threats of tariffs on European countries and his proposal to acquire Greenland on the Asia-Pacific markets. The Nikkei 225 and S&P/ASX 200 fell, while the Hang Seng index rose slightly. Gold prices hit a record high as investors sought safe havens. Trump's threats led to a decline in US stock futures, and European leaders are considering retaliatory measures. The article highlights the escalating trade tensions between the US and Europe, with Trump's tariffs and threats causing a flight from US assets.

The article discusses the market reaction to US President Donald Trump's aggressive moves towards annexing Greenland, leading to a 'sell America' trade as investors flee US assets. Major US indexes had their worst day since October, with the S&P 500 and Nasdaq Composite falling into negative territory for 2026. The VIX index spiked to 20.99, and gold prices hit new records. Greenland's Prime Minister Jens-Frederik Nielsen warned that the US has not ruled out using military force to take control of the island. Ray Dalio, founder of Bridgewater Associates, cautioned that Trump's actions could lead to foreign governments and investors reconsidering their appetite for US assets. Meanwhile, Netflix posted a narrow earnings beat, and the UK's inflation rate was higher than expected in December.

U.S. Treasury Secretary Scott Bessent expressed no concern over the sell-off of U.S. Treasuries by European investors, particularly Denmark, amidst rising tensions between the U.S. and Europe over Greenland. Bessent downplayed Denmark's investment in U.S. Treasury bonds, calling it 'irrelevant.' The sell-off was triggered by President Donald Trump's threats to impose tariffs on European countries as part of his push to acquire Greenland, which the U.S. deems a national security concern. Bessent attributed the sell-off to a Deutsche Bank analyst report that was later disowned by the bank's CEO.