Trump has threatened Denmark and seven other European nations with high tariffs unless a deal is reached to sell the self-governing Danish territory, claiming that Greenland is crucial to US security because of China and Russia’s strategic ambitions in the Arctic.
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The warning appears to have shook the markets.
As Trump increased his threats to occupy the Arctic island, the benchmark S&, P 500 on Wall Street fell by nearly 2.1 percent on Tuesday.
The Dow Jones Industrial Average decreased by nearly 1.8 percent while the tech-focused Nasdaq Composite decreased by nearly 2.4 percent.
Wall Street’s worst day since October was marred by the declines.
A basket of major currencies saw a decline in the US dollar, which has historically been a safe haven for investors during times of market volatility.
The FTSE 100 in London closed down about 0.7 percent, and the DAX in Frankfurt fell more than 1%.
Gold, which frequently draws buyers when uncertainty is high, increased by nearly 2 percent, surpassing the previous high of $4,700 per ounce.
The sell-off in Asian stocks continued into Wednesday, with the benchmark indexes for South Korea and Japan’s Nikkei 225 falling more than 1% in early trading before recouping the majority of their losses later in the day.
Trump’s call for US control of Greenland has caused US-European relations to drop to their lowest point in decades, raising questions about the NATO military alliance’s survival and transatlantic trade’s flow.
Despite the fact that both the US and Denmark are NATO members, Trump has also refrained from using force to accomplish his objectives.
The 32-member transatlantic alliance, which operates on the principle that an attack against any NATO member should be regarded as an attack against all, has been repeatedly stated by Denmark that Greenland is not for sale and that any attempt to seize control of the island by force would endanger it.
The European Union will hold an urgent meeting on Thursday to discuss Trump’s threats, including the potential enactment of an anti-coercion system that would put severe restrictions on US tech companies operating in the global market.
During a briefing at the White House on Tuesday, Trump said, “You’ll find out.
Trump has expressed confidence that a deal will be reached with Greenland and that “things are going to work out pretty well,” and will meet with NATO allies on Wednesday at the annual World Economic Forum (WEF) gathering in Davos.
Ursula von der Leyen, president of the European Commission, stated at the Davos forum that the bloc would work with the US to improve Arctic security but that it would not compromise on national sovereignty.
Von der Leyen said, “We view the American people as our friends as well as our allies.”
Source: Aljazeera
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