President Donald Trump this week threatened to impose 10% tariffs, escalating to 25% by June, on eight European nations for opposing the sale of Greenland to the United States.
But as events unfolded, then threat seemed to be over just as fresh anxiety started to reverberate through a global shipping industry hoping to shore up uneven rates across regions.
Trump on Wednesday posted that he would not levy new tariffs after reaching a framework agreement with the EU on Greenland.
Trump earlier posted on social media his plans to levy 10% tariffs starting Feb. 1 on Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the United Kingdom for opposing his efforts to acquire Greenland. Levies will increase to 25% in June if no deal is agreed to.
EU markets total 20% of U.S. imports by value; Germany, the single largest European exporter to the U.S., and the UK and France together exported more than $300 billion worth of goods to the U.S. through October. The largest share comprised pharmaceuticals, medical supplies and devices, and vehicles and automotive parts.
“While Europe opted not to retaliate for U.S. tariffs last year, this time seems different,” said analyst Judah Levine of shipping platform Freightos, in a note to clients prior to Trump’s decision. “EU leaders have scheduled an emergency meeting in Brussels to discuss their options. They could let retaliatory tariffs on $100 billion of U.S. exports – approved last year but suspended until Feb. 7 – go into effect; withhold pending approval of parts of the EU-U.S. trade deal like reducing tariffs on some U.S. goods to zero; or even close U.S. military bases.”
The EU could also deploy its so-called trade “bazooka,” which provides wide-ranging controls to counter economic aggression.
Levine said that with February near, frontloading for translate-Atlantic shippers isn’t an option. But he added with foresight that in the past Trump’s extreme tariff threats were short-lived and served mostly as leverage in trade negotiations. Trump could have also invoked emergency tariff powers although they would be shadowed by a pending Supreme Court decision over their legality.
At the World Economic Forum in Davos, Switzerland, Trump calmed markets by walking back his threat to take Greenland from Denmark by force.
Copenhagen’s dominant ocean shipping business is in the crosshairs of the Greenland controversy. Danish flag carrier Maersk (MAERSK-B.CO) could have been hard-hit by tariffs that undermine EU trade. It’s unknown how the dispute would have affected its U.S.-registered carrier, Maersk Line, which provides transportation services for the American military.
The latest trade drama increases uncertainty, undermining the expected stabilization of the 2026 trade war that followed the US de-escalation with China and new trade agreements late last year.
The Freightos (NASDAQ: CRGO) Baltic Index indicates the demand run-up in eastbound trans-Pacific rates prior to the Lunar New Year holiday has peaked, “suggesting carriers aren’t moving forward with planned mid-month general rate increases”.
Last week Asia-U.S. West Coast prices fell 3% to $2,668 per forty foot equivalent unit (FEU). Rates to the U.S. East Coast from Asia decreased 2% to $3,947 per FEU. Asia-North Europe rates were off 3% to $2,893 per FEU; Asia-Mediterranean prices finished 5% lower at $4,623 per FEU.
Falling Europe rates mark the first reductions since prices started climbing in mid-October.
“Rates for all these lanes are still likely to stay elevated in the near term as the holiday approaches and then face downward pressure as demand eases post-LNY,” Levine said, with carriers already announcing blanked sailings.
Find more articles by Stuart Chirls here.
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