Investors sold off the US dollar and sought safe-haven assets after Trump threatened to impose tariffs on Greenland.

Investors sold off the US dollar and flocked to safe-haven assets, while precious metals, bonds, the euro, the yen, and the Swiss franc received support after Trump threatened to impose tariffs on Greenland.

On January 19, 2026, at 9:30 AM, Reuters reported that global investors turned to safe-haven assets in Monday's trading as Europe prepared to retaliate after U.S. President Donald Trump threatened to escalate tariffs on allies in order to pressure him on his plan to acquire Denmark's Arctic territory, Greenland.

Trump stated that the U.S. would impose an additional 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom starting February 1, and would raise it to 25% starting June 1 if no agreement is reached regarding Greenland.

These pressures pushed precious metals and bonds higher, while stock markets fell and the dollar weakened in Asian trading. The euro, yen, and Swiss franc strengthened, reflecting a shift in investment towards safe-haven assets.

Analysts and investors' views on the risks from Trump's taxes are as follows:

Koon Goh, head of Asia research at ANZ in Singapore, said that normally, threats of tariffs would put pressure on the euro, but this time the financial markets responded by selling the dollar. Every time policy uncertainty from the US increases, it reflects that the market is pricing in more political risk to the dollar. He also questioned the extent of Europe's retaliation against the US, noting that current US-EU and US-UK trade agreements appear to face high uncertainty.

Wichanu Warathon, Head of Macro Research for Asia (excluding Japan) at Mizuho, ​​believes that this tariff threat has practically discarded previously anticipated deals and forced markets to reassess risks, particularly key assumptions regarding the euro/dollar exchange rate, which impacts the outlook for European recovery, especially after recent data signaled that Germany might be beginning to recover. He emphasized that Trump continues to use tariffs as a tool to pressure allies without hesitation, keeping markets volatile.

Sharu Shanana, head investment strategist at Saxo, stated that markets are beginning to learn that tariff threats are often mitigated or postponed, leading them to respond cautiously rather than panicking. However, linking tariffs to geopolitics makes the risks difficult to assess and could trap risk premiums in the market for longer. Even without a major tariff increase, uncertainty could cause companies to delay investments and supply chain decisions, gradually hindering long-term growth. If a clear implementation date is set, industry-specific targets are identified, or there is retaliation from the EU, volatility could widen.

Matt Simpson, senior market analyst at StoneX, said that every time Trump gives an interview, the market questions how serious he is. But introducing tariffs into the equation this time may cause the market to underestimate the risk, as the geopolitical impact is significant for NATO and could be a test of who the United States' true allies are in the future.

Reference: www.reuters.com

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