US President Donald Trump dramatically escalated his pursuit of Greenland on Saturday. He threatened several European Union nations with substantial tariffs. These tariffs could reach up to 25% until he secures control of the Danish territory.
Targeted Nations and Tariff Schedule
The US President directed his threats at traditional NATO allies. The list includes Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. Trump announced a clear timeline for these punitive measures.
Starting February 1st, 2026, these countries will face a 10% tariff on goods sent to the United States. This tariff will then jump to 25% from June 1st, 2026. Trump stated the tariffs would remain until a deal for the "Complete and Total purchase of Greenland" is finalized.
Market Experts Weigh In on Global Impact
Market analysts warn this move will heighten geopolitical tensions. It creates significant global uncertainty. This environment typically fuels demand for safe-haven assets like gold and silver.
Precious Metals Outlook
Seema Srivastava, Senior Research Analyst at SMC Global Securities, explained the likely effect. "The recent tariff announcement is likely to boost gold and silver prices," she said. Investors often turn to these assets during trade conflicts. The tariffs may also weaken the US dollar, making precious metals more attractive.
Anuj Gupta, a SEBI-registered commodity expert, echoed this view. He expects a "gap-up opening" for gold and silver when markets reopen. The trust deficit between the US and EU could widen, fueling further uncertainty. Gupta noted current hurdles for gold at $4,650 per ounce and silver at $93 per ounce. These levels could be tested if tensions escalate into a serious trade war.
Implications for the Indian Stock Market
The situation presents a mixed picture for Indian equities. Short-term volatility is a distinct possibility if a broader trade war erupts. Key Indian sectors like pharmaceuticals, textiles, gems and jewellery, steel, automobiles, solar equipment, and leather could feel immediate effects.
A Potential Silver Lining: The India-EU FTA
However, experts identify a significant long-term opportunity. Trump's pressure on the EU may accelerate the finalization of the India-EU Free Trade Agreement (FTA). Negotiations are already in their final stages.
Sandeep Pandey, Co-founder of Basav Capital, highlighted this point. "Trump's tariffs are expected to fuel the FTA negotiations between India and the EU," he stated. A finalized deal would be a major boost for the Indian economy, enhancing trade in several key sectors.
Seema Srivastava added that a weaker US dollar could make Indian exports more competitive. This could benefit sectors like IT and textiles. While Monday's market open might see fluctuations, strong quarterly results from major Indian banks could provide underlying support.
Background and Reactions
Trump's threats coincide with widespread protests. Thousands demonstrated in Greenland's capital, Nuuk, against the proposed acquisition. Further protests occurred in Copenhagen and other Danish cities.
The US President framed his actions as necessary for global security. He called the situation "not tenable or sustainable" and expressed immediate openness to negotiation with Denmark and the other involved nations. This move creates unprecedented tension within the NATO alliance, targeting fellow members with trade penalties.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies. We advise investors to consult certified experts before making any investment decisions.
