President Trump Withdraws European Tariff Threats After Greenland Framework Agreement Reached with NATO

United States USPresident Trump trumpannounced on Wednesday in Davos that he has reached an agreement on a framework for a future deal on Greenland with NATO and will not impose previously threatened tariffs on eight European nations. The announcement effectively suspends the threat of trade duties against Denmark DK, Sweden SE, France FR, Germany DE, the Netherlands NL, Finland FI, Britain GB, and Norway NO. Trumphad previously vowed on Saturday to implement increasing tariffs starting February 1 on these nations until the United Stateswas allowed to purchase Greenland, though he has now ruled out military action in the territory.

The news triggered a measurable relief rally in U.S.equities after the prior threats had spooked markets and triggered broad selloffs in domestic assets. The S&P 500 GSPCindex rallied over 1.5 percent as market sentiment reversed immediately following the announcement. In the foreign exchange markets, the Euro/US Dollar EURUSDfell 0.36 percent to $1.17 on Wednesday, reversing gains of more than 1 percent from the prior two sessions. Notably, the euro had reached $1.168 on Tuesday, which marked its highest level since December 30.