International credit ratings agency Fitch Ratings has warned that the threat of new US tariffs on European countries, linked to Greenland, represents a significant escalation in transatlantic tensions, with potential consequences for economic growth, defense spending and geopolitical stability.
As previously reported, US President Donald Trump has proposed imposing an additional 10% tariff from February 1, rising to 25% from June 1, on Denmark and seven other European countries until an agreement is reached on the complete purchase of Greenland by the US. Fitch assumes any new tariffs would be applied on top of existing duties.
Legal uncertainty and domestic resistance
Fitch noted that implementation remains highly uncertain, as the likely legal basis—the International Emergency Economic Powers Act—is currently under review by the US Supreme Court. Even if this route is blocked, alternative legal mechanisms could still be used.
The agency also pointed to potential domestic opposition in the US, citing concerns over inflation and the broader fallout from escalating trade tensions with Europe.
Economic impact on Europe
According to Fitch, a 10% US tariff could cut European GDP by around 0.5% by end-2027, while a 25% tariff could roughly double the impact. Germany would be the most exposed, with GDP potentially 0.8–0.9% lower under a 10% tariff scenario.
While Fitch expects the EU’s initial response to remain relatively restrained, the bloc has prepared potential countermeasures covering around €95 billion of US imports. Some member states have also raised the possible use of the EU’s anti-coercion instrument, which could extend retaliation beyond goods to services.
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