Danish C25 Index Plunges 2.7% Amidst New US Tariff Threats Over Greenland

Danish Stock Market Reacts to US Tariff Ultimatum

The Danish C25 index recorded its most significant single-day decline in six months on Monday, January 19, 2026, falling by 2.7%. This downturn, marking the worst trading day for the elite index since July 29, 2025, was a direct response to renewed threats from US President Donald Trump concerning additional tariffs on European goods.

President Trump announced plans to impose a 10% tariff on imports from Denmark and several other European countries, effective February 1, 2026. He further stated that these tariffs would escalate to 25% by June 1, 2026, if an agreement regarding the 'complete and total takeover of Greenland' by the United States is not reached.

Greenland Dispute Fuels Transatlantic Tensions

The tariff threats are rooted in a geopolitical dispute over Greenland. President Trump has cited the deployment of military forces by Denmark and other European nations to Greenland as a security risk, prompting his demand for US control over the autonomous Danish territory. The tariffs are not exclusive to Denmark, with Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland also targeted by the proposed import duties.

Greenland's government leader, Jens-Frederik Nielsen, and finance and tax minister, Múte B. Egede, have indicated that while military force is unlikely, they are preparing for all potential scenarios.

European Union Considers Retaliatory Measures

In response to the US threats, European Union countries are actively discussing potential countermeasures. These include the possibility of imposing retaliatory tariffs on US goods, with estimates suggesting a value of up to 93 billion euros (or nearly 700 billion kroner). European leaders are also considering the activation of the EU's anti-coercion instrument (ACI), colloquially known as the 'trade bazooka,' which allows the bloc to impose sweeping trade sanctions.

Danish Prime Minister Mette Frederiksen has publicly called for a robust European response, emphasizing that a trade conflict would be detrimental to Danish, European, and broader Western interests.

Economic Outlook Amidst Trade Uncertainty

Economists are cautioning about the potential negative impact of these escalating trade tensions. Palle Sørensen, chief economist at Nykredit, noted that while the current threat is not yet a signed decree, its implementation would likely affect economic activity in Denmark and across Europe. Goldman Sachs estimates suggest that a 10% tariff could lead to a reduction in real GDP of between 0.1% and 0.2% in the affected European countries. The uncertainty surrounding these tariffs is expected to create challenges for businesses in planning investments and exports to the US.