As the European Union weighs options to retaliate against President Donald Trump’s latest tariffs, its most potent weapon may be in financial markets. France is already urging the EU to deploy its “anti-coercion instrument,” which can target foreign direct investment and finance as well as trade. That’s after Trump announced new U.S. tariffs on NATO countries that sent troops to Greenland amid his plans to take over the semi-autonomous Danish territory. At face value, a 10% tariff rising to 25% would have minimal economic consequences, Capital Economics chief economist Neil Shearing said in a note Sunday, estimating they would reduce GDP in the targeted NATO economies by 0.1-0.3 percentage points and add 0.1-0.2 points to U.S. inflation. “The political ramifications would be far greater than the economic ones,” he warned, with any attempt by the U.S. to seize Greenland by force or coercion potentially leading to irreparable harm to NATO.
Published: January 18, 2026 5:44 pm
Source: Fortune — Read original