The economic fight over Greenland
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Why is the U.S. pushing to buy Greenland and how has it become an economic dispute?
The fight over Greenland is now an economic one. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. President Trump wants to buy Greenland, though he hasn't ruled out military force either. And now he is threatening to increase tariffs on eight European countries unless they agree to let the U.S. purchase the Danish territory. The European Union is now considering retaliation with its own tariffs on U.S. products. All of this is sure to come up at the World Economic Forum in Davos, which kicks off today. Marketplace's Nova Sappho has more.
President Trump over the weekend said he would raise import taxes on goods from eight European countries, including Denmark, Germany, and the UK, which is not part of the European Union. Trump and EU leader Ursula von der Leyen are both scheduled to attend the World Economic Forum in Switzerland this week. And Hosuk Lee Makiyama, director of the Brussels-based European Centre for International Political Economy, says the first order of business for EU leaders will be to ratchet down trade tensions.
Basically trying to talk down Mr. Trump and trying to rewind the tape a little bit.
European leaders are also set to hold an emergency summit this Thursday to discuss tougher measures should talks fail. Lee Makiyama says they have the option of a new economic tool commonly referred to as the trade bazooka.
What tariff threats did President Trump make against eight European countries and why?
What it allows you to do is that you can go after a whole different set of items rather than just goods.
Including tech companies and their services and intellectual property rights. I'm Nova Safo for Marketplace.
All right, let's do the numbers. Hong Kong's Hang Seng Index closed down 1% today. Japan's Nikkei closed down 0.7%. U.S. stocks and bond markets are closed today in observance of Martin Luther King Day. Normal trading hours resume tomorrow. But we still got one number for you. $18 trillion. That is the combined wealth of the world's billionaires. That number is the highest it has ever been after surging 16% in 2025 and 81% since 2020. This is according to anti-poverty group Oxfam, which points out that one in four people worldwide struggle with food insecurity and nearly half the world's population lives in poverty.
China's economy grew at 5% last year. That is despite economic challenges, not least of which is President Trump's trade war. One reason is that China's industries are adapting, and that is having spillover effects in the rest of the world. Last week, China reported its largest annual trade surplus ever.
How is the European Union considering retaliatory tariffs over the Greenland dispute?
That means China is exporting a lot more stuff than it's importing, even though it is sending less stuff to the United States. So where is all that stuff going? Well, more of it is going to the EU and the UK. And there are pros and cons to that. Jay Shambaugh is professor of economics and international affairs at the George Washington University. Jay, good morning. Good morning. So tariffs cut down how much we in the U.S. buy from China. But all that stuff, I guess, has to go somewhere, which is everywhere else. How big is this shift now?
It's pretty large, especially when you're talking from China. Tariffs don't necessarily change how much you import or export, but they very much redirect where they are because it's not like we have a flat tariff on everybody. Our imports from China are way down. Europe's imports from China are up a fair amount.
How is that showing up in Europe? Because, I mean, someone's got to all of a sudden decide they want to buy more of this stuff.
So I think you could divide it into two types of goods. So some I think is what we might think of as kind of cheap products that are somewhat disposable goods. Part of it is just over the last three years, the real value of China's currency has fallen quite a bit against the euro. So China has had very, very low inflation, in some cases deflation in some goods. Europe's price has been rising, so the relative cost of goods has been going up for European goods relative to China. And then the euro versus the RMB has moved in a way that has made Chinese goods just cheaper in Europe than they used to be.
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Chapters
4 chapters
1
Why is the U.S. pushing to buy Greenland and how has it become an economic dispute?
0:01–1:23
2
What tariff threats did President Trump make against eight European countries and why?
1:23–2:49
3
How is the European Union considering retaliatory tariffs over the Greenland dispute?
2:49–5:47
4
What is the ‘trade bazooka’ and how could the EU use it against U.S. tech and IP?
5:47–7:30