Reuters reported a drop in stock markets due to the conflict over Greenland

Financial markets reacted sharply to renewed concerns about a potential trade war between the United States and the European Union (EU), which intensified amid the dispute over Greenland. This was reported by the Reuters news agency on January 20.

"The prospect of a trade war between the US and the EU, revived by the dispute over Greenland, has provoked large-scale sales of the dollar and stock markets on both sides of the Atlantic," the article says.

Against this background, investors began to withdraw from risky assets. The US dollar index, which reflects the exchange rate of the US currency against a basket of major world currencies, decreased by 0.9%. European stock markets also recorded a significant drop: the German DAX index and the Italian FTSE MIB each lost 1.3%.

The negative dynamics spread to the American markets. Futures for the benchmark S&P 500 index also fell 1.3%. Market participants fear that the escalation of the political conflict may lead to the introduction of new trade restrictions and deterioration of conditions for international trade.

Protest reaction: The EU is trying to develop a unified response to the US threats over Greenland

What hinders the common approach of the Europeans and what levers do the parties have?

Yesterday, US Treasury Secretary Scott Bessent called Europe's possible response to the US president's duties over Greenland an unwise step. This is how the minister answered the question of whether Washington is concerned about a possible European response to American duties.

Prior to that, on January 14, US President Donald Trump noted that US relations with Denmark were "good", but Greenland was necessary for Washington to ensure national security. Later, he imposed duties of 10% with the possibility of increasing to 25% in relation to a number of European countries due to the situation around Greenland.

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