Trump-Greenland latest: Germany and France threaten retaliatory tariffs as Starmer warns against trade war

Additional US tariffs would burden the chemical and pharmaceutical industries on both sides of the Atlantic, German industry group VCI said on Monday.

“A tariff spiral would cause high economic costs in both Europe and the US,” VCI said in a statement. “US president [Donald] Trump is counting on Europe being divided. Europe’s response can therefore only be unity – united, determined and at all levels.”

EU leaders will convene in Brussels on Thursday for an emergency summit following US president Donald Trump’s threats to impose new tariffs on several EU countries over his demand to acquire Greenland, a European Union spokesperson said on Monday.

The summit is planned to start at 1800 GMT.

Questions were raised over the weekend about how the UK might respond and if that could include the King pulling out of a state visit floated to take place in April. The King’s trip was meant to be part of a campaign to revitalise a trade agreement with the US after a promised American investment in Britain from tech firms was paused , according to The Times.

Bryony Gooch reports:

Tariffs are a tax on products imported into a country.

They are typically charged as a percentage of the price a buyer pays a foreign seller.

It means a US company buying a product from a UK supplier would now have to pay an additional amount, such as 10 per cent, to the state, on top of the original price.

The companies buying the imported goods pay the tariffs.

In this case, it means US firms will have to pay more for international goods from countries affected.

Donald Trump has used his tariff policies to encourage US firms to buy products manufactured within the country, and therefore avoid the additional tax.

Tariffs are collected by the national customs authority of the country into which the goods are being imported.

In the UK, this means any tariff is paid to His Majesty’s Revenue and Customs (HMRC) when goods enter the UK.

In the US, tariffs are collected by Customs and Border Protection agents at ports of entry across the country, such as airports and ports.

Donald Trump’s peevish narcissism is Russia’s greatest asset. And while the US president’s myopic view of Greenland dominates geopolitics, it distracts from what is going on thousands of miles away to the east.

World affairs editor Sam Kiley writes:

The biggest export from the UK to the US is machinery, such a cars, engines and turbines.

Some consumer sectors could also be particularly affected, such as Scotland’s whisky industry, which exported almost £1 billion worth of whisky to the US in 2024.

There is a significant range of tariff costs depending on products and sectors, and the UK and US governments made a number of agreements last year.

Nevertheless, broadly speaking, the US imposed a 10 per cent tariff on top of all previously existing tariffs and duties.

Last year’s 2025 economic prosperity deal secured tariff exemptions for UK steel, aluminium, aerospace and cars, although many of these only cover a certain quota of products.

Mr Trump has now threatened to charge the UK a 10 per cent tariff “on any and all goods” sent to the US from 1 February.

This would then increase to 25 per cent from 1 June, until a deal is reached for Washington to purchase Greenland from Denmark.

He said he would impose this on Denmark and European allies opposed to his plans, who currently also include France, Germany, the Netherlands, Finland, Norway and Sweden.

It is not known how this will affect products which are currently exempt from tariffs.

Countries such as the UK that have high exposure to the US could see their economic growth hit by the tariff plans.

Capital Economics’ chief economist Neil Shearing suggested the wider economic effect would be “modest” but it would “shave a few tenths of a percentage point off GDP in the affected economies”.

He added: “The countries most exposed are those with the largest export shares to the US – notably the UK and Germany.

“A 10 per cent tariff could reduce GDP in those economies by around 0.1 per cent, while a 25 per cent tariff could knock 0.2-0.3 per cent off output.”

Goldman Sachs economists Giovanni Pierdomenico and Sven Jari Stehn said the impact could be higher, indicating that the proposed 25 per cent tariff could affect countries’ GDP by between 0.25 per cent and 0.5 per cent.

Reform UK leader Nigel Farage described Donald Trump’s threats of tariffs over Greenland as “wrong”, and said he would be speaking to the US administration about it at the World Economic Forum in Davos, Switzerland, this week.

Speaking outside Parliament on Monday morning, Mr Farage told reporters: “I think he’s wrong. I think what he’s done is wrong. I don’t think you turn on your allies.

“To use economic threats against the country that’s been considered to be your closest ally for over 100 years is not the kind of thing you expect. It’s wrong. It’s bad, very, very hurtful to us.

“I’m all for Trump taking out enemies of the West, (Venezuela’s Nicolas) Maduro, the Iranian regime, but if he falls out with his own allies and leaves America isolated, that will be a very bad place to be. So I’m worried about it.

“I will be having some words with the American administration in Davos on Wednesday.”

Asked if the Government should impose tariffs in return, he said: “I think to retaliate would probably hurt us even more. We have to negotiate, and it’s one area where, with Brexit, we are free to negotiate directly.”

European stock markets fell on Monday as investors turned to safe-haven assets amid the turbulent geopolitical landscape. Meanwhile, gold rose 1.6 per cent to $4,666 an ounce after reaching a peak at $4,689. Silver also reached a record high of $94.08 an ounce before falling back down to $93.15.

It comes after the US president threatened additional tariffs on eight European countries as his attempts to claim Greenland intensify. On Saturday, Mr Trump said he could impose 10 per cent tariffs on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland until the US is allowed to buy the Danish territory.

Nicole Wootton-Cane reports: