President Donald Trump announced a 10% tariff on eight European nations, threatening to raise it to 25% by June unless Greenland is sold to the U.S. The move targets Germany, France, UK, and Nordic states, disrupting a July trade truce.

Analysts warn the tariffs could cut Eurozone GDP growth by up to 0.5 percentage points. ING estimates a 25% levy may shave 0.2 points off growth, while UBS sees 20 basis point hits per 10% increase. EU leaders condemned the plan, jeopardizing the August trade deal.

European officials are considering countermeasures, including activating the bloc’s Anti-Coercion Instrument, though divestment from $8 trillion in U.S. assets remains unlikely. Companies may reroute shipments through Belgium to avoid higher levies on Dutch and French ports.

The transatlantic rift deepens as EU parliament delays ratifying zero-tariff access for U.S. goods. With Trump linking the Greenland deal to Nobel aspirations, markets brace for prolonged trade friction and geopolitical volatility ahead.