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Over the weekend, Trump announced that Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland would face a 10% tariff from February 1, rising to 25% from June 1, unless the U.S. is permitted to buy Greenland. Trump is obsessed with Greenland citing national security reasons. According to him, if the US doesn’t take over Greenland, Russia and China will. The reason is probably another. Greenland holds some of the world’s largest untapped deposits of rare earth minerals, which are critical for tech manufacturing and advanced weaponry. Currently, China dominates the global supply chain for these minerals. Owning or controlling Greenland’s resources would significantly reduce U.S. economic and military reliance on Chinese exports.Since last year, we’ve seen Trump using tariff threats as a type of coercion to force other countries to accept his demands. Every time he threatened to impose tariffs, he set a future date for them to come into effect. He used this strategy over and over again to speed up or put pressure on negotiations. Eventually, he always got away with something or outright folded his hand.This led to the famous TACO trade (“Trump Always Chickens Out”) when the markets react negatively to his tariff threats, stay in a kind of a limbo for some time, and eventually rally as he reaches an agreement or outright folds due to fears of too much market damage (see Liberation Day). It became so obvious that the reactions to his threats started to have less and less effect.Trump loves the stock market, it’s his “benchmark” of success. He loves to brag about record highs and how that is the result of his actions. Moreover, this year we have the midterm elections and we’ve already seen Trump trying to appease the voters with affordability policies. He’s unlikely to push too hard on tariffs if that results in weakness for the stock market.This week we have the World Economic Forum in Davos from 19th to 23th January. Trump will be there on Wednesday and other G7 leaders are also expected. That might be the first chance for a meeting. Trump will likely post something on his Truth Social if that happens. If we see de-escalatory language, the market will likely rally on that. In any case, the market’s focus is now on this latest trade war, and even if we might fade the initial negative reaction on the TACO expectations, the upside in the stock market will likely remain capped and could extend on further escalation until we get a resolution. Therefore, watch out for develpments in the next days and weeks as they will provide trading opportunities.
This article was written by Giuseppe Dellamotta at investinglive.com.
💡 DMK Insight
So, Trump’s tariff threats could shake up the markets, and here’s why that matters: geopolitical tensions often lead to volatility in both traditional and crypto markets. With ETH currently at $3,213.72, traders should be on high alert for potential price swings as these tariffs could impact investor sentiment and risk appetite. If the situation escalates, we might see a flight to safety, which historically boosts assets like Bitcoin while putting pressure on altcoins like Ethereum. It’s also worth noting that the proposed tariffs could disrupt trade relations, leading to broader economic implications. If the U.S. economy feels the pinch, we could see a ripple effect on global markets, including forex pairs tied to the Euro and British Pound. Traders should keep an eye on the $3,000 support level for ETH; a drop below that could trigger further selling. On the flip side, if ETH holds above this level, it might attract buyers looking for a bargain amid the chaos. Watch for any updates on trade negotiations or reactions from European leaders, as these could serve as catalysts for ETH’s next move.
📮 Takeaway
Monitor ETH closely around the $3,000 support level; any break below could signal further downside amid rising geopolitical tensions.
