Trump rules out seizing Greenland by force and drops tariffs on European allies
European markets rose as Donald Trump ruled out a forceful seizure of Greenland and canceled tariffs, even as regional corporate earnings forecasts declined.
Insights:
President Donald Trump donald trumpannounced on Thursday, January 22, 2026, that the US 
USwould not seize Greenland 
GLby force and would not impose 10% tariffs on eight European allies. This decision followed a framework agreement regarding the Arctic island, which Trumpreached on Wednesday. The President explicitly ruled out seizing Greenlandby force on Wednesday as part of the new arrangement. Following the announcement, the STOXX 600 index rose around 1% as investors reacted to the de-escalation of trade tensions.
USwould not seize Greenland GLby force and would not impose 10% tariffs on eight European allies. This decision followed a framework agreement regarding the Arctic island, which Trumpreached on Wednesday. The President explicitly ruled out seizing Greenlandby force on Wednesday as part of the new arrangement. Following the announcement, the STOXX 600 index rose around 1% as investors reacted to the de-escalation of trade tensions.Despite the immediate relief in financial markets, the underlying fundamentals for the EU 
EUcorporate sector continue to deteriorate as the earnings season gathers steam. European firms are now expected to report a 4.2% drop in 2025 fourth-quarter earnings on average. This 4.2% earnings drop is worse than the 4.1% decrease analysts expected just a week ago and marks the worst earnings performance for the region in the past seven quarters. The disconnect highlights structural weaknesses that tariff relief alone cannot resolve.
EUcorporate sector continue to deteriorate as the earnings season gathers steam. European firms are now expected to report a 4.2% drop in 2025 fourth-quarter earnings on average. This 4.2% earnings drop is worse than the 4.1% decrease analysts expected just a week ago and marks the worst earnings performance for the region in the past seven quarters. The disconnect highlights structural weaknesses that tariff relief alone cannot resolve.
