Investment Conclusion
President Trump has opened a can of tariff worms about Greenland. There are a lot of moving parts here, some of them very disruptive. But here are the key issues:
- The Current EU – US Trade Deal is stuck in the EU Parliament, which must ratify it and won’t do so as long as Trump threatens the EU about Greenland. What will President Trump do about that?
- The President is ignorant of tariff law; he cannot impose tariffs on a selection of EU states. The EU trades as a single legal entity, so the products of its member states cannot be singled out. Only the UK and Denmark can be singled out and victimised. That’s a risk for the luckless Keir Starmer whose special US trade deal now looks like an error of judgement.
- The US Supreme Court has to be on the point of laying its tariff egg. A ruling favourable to the Administration on the use of IEEPA could unleash a torrent of political tariffs. A blanket ruling against the Administration’s use of EEPA would seriously weaken Trump and make this latest Greenland threat empty. The most likely ruling is that IEEPA can only be used for economic issues. That will severely limit the power of the President on the international stage and vitiate the threat from political tariffs: India (Russian Oil); Iran (10% tariffs on all who trade with Tehran – the big questions being China and Russia; and of course now Greenland.
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