Gold and silver climbed to record highs on Monday as shares fell across much of Asia and futures pointed lower in Europe and the United States, after President Donald Trump threatened a new round of tariffs on eight European countries linked to a dispute over Greenland.
The proposed measures would impose 10 per cent levies on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland from 1 February, rising to 25 per cent from 1 June, unless those governments agreed to what Mr Trump described as a US takeover of Greenland. The island is a Danish autonomous territory, and Mr Trump has repeatedly presented American control as a national security requirement.
The tariff threat followed talks that, according to Mr Trump, failed to resolve “fundamental disagreement” over the territory. European capitals responded with a joint statement warning that tariff threats would undermine transatlantic relations and risk escalation.
In the European Parliament, senior figures on the International Trade Committee have moved to halt work on implementing last year’s EU–US trade deal, arguing that proceeding while Washington threatens tariffs over Greenland would amount to rewarding coercion. The Parliament had been preparing legislative steps to remove a large share of EU import duties on US goods, alongside an extension of zero duties for US lobster, with votes scheduled for 26–27 January to set its position; those votes are now being pushed towards postponement. A cross-party group of 23 MEPs has also written to Parliament President Roberta Metsola urging a freeze until the United States drops its threats, with support coming from the Left, the Social Democrats and the Greens, and with the Renew Europe leadership publicly signalling that a delay should be considered if the pressure continues.
French officials indicated that President Emmanuel Macron would ask the EU to consider activating its anti-coercion instrument if the United States implemented the tariffs. The mechanism, designed to deter economic pressure on the bloc, would allow Brussels to restrict imports of goods and services into the EU single market. The EU has not previously used the instrument, but it has been developed as a response tool for coercive trade measures.
Reports suggested that EU member states were discussing possible retaliatory tariffs on €93bn worth of US goods. While no formal decision has been announced, the figure underlined the scale of measures under consideration if the dispute moved from threats to policy.
Markets took the prospect of a widening transatlantic trade row as a signal to reduce exposure to riskier assets. Gold, a traditional haven during periods of political and economic uncertainty, rose to a peak of US$4,690.59 an ounce. Silver climbed to US$94.12. The rally added to gains recorded earlier in January, when investors had already been tracking rising geopolitical tension, including fresh US pressure on Iran and political developments in Venezuela.
Equities moved in the opposite direction. Shares fell in Tokyo, Hong Kong, Shanghai, Sydney, Singapore and Wellington. Seoul and Taipei were among the exceptions, edging higher. European and US stock index futures were lower, suggesting selling pressure could extend beyond Asia as markets opened in London and on the Continent.
In currency markets, the dollar weakened against major peers, with the euro, sterling and the yen higher. The move reflected a shift away from the US currency as investors weighed the risk that tariff confrontation could slow trade flows and unsettle corporate earnings, particularly in industries reliant on global supply chains.
Even if the immediate tariff threat were negotiated down, the broader market concern is that trade policy is becoming more politicised, with supply chains increasingly shaped by strategic conditions rather than cost alone. For European manufacturers and exporters, that risk is not abstract. Many rely on US demand, while European consumers and industries are also major buyers of US goods and services, leaving both sides exposed if retaliation gathers momentum.
Economic data from China did little to shift sentiment. Official figures showed the economy grew by 5 per cent last year, in line with Beijing’s target, though growth slowed sharply in the final quarter compared with the previous three months. The numbers were broadly expected and were quickly overtaken by developments in the Greenland dispute and tariff threats.
In North Asia, investors also appeared to discount warnings from US Commerce Secretary Howard Lutnick that South Korean chipmakers and Taiwanese firms could face tariffs as high as 100 per cent if they did not expand production in the United States. The comments added to the broader backdrop of trade pressure but did not prompt a marked sell-off in Seoul or Taipei.
For European policymakers, the immediate issue is whether Washington proceeds with the tariffs and whether the EU answers with countermeasures. For markets, the question is whether deadlines set for February and June become flashpoints for a deeper trade confrontation. Monday’s moves — precious metals up, shares down, and the dollar weaker — reflected the first repricing of that risk.
First published on euglobal. news.
