CNBC Daily Open: A trade 'bazooka' against Trump's Greenland tariffs is in the cards for the EU
Key Points
- Trump threatened 200% tariffs on French wines and champagne after French President Macron reportedly refused to join his 'Board of Peace' on Gaza
- EU's Anti-Coercion Instrument could impose up to 93 billion euros ($108 billion) in tariffs and other restrictions on the U.S., though Germany remains hesitant due to export dependence
- European industries at risk include autos (BMW, Ferrari), luxury goods (LVMH, Hermès), and pharmaceuticals (Novo Nordisk, Novartis), with markets showing flight to safe-haven assets like gold and the dollar
AI Summary
Summary: EU Considers Trade "Bazooka" Response to Trump's Greenland Tariffs
Key Developments:
President Trump threatened 200% tariffs on French wines and champagne after French President Emmanuel Macron reportedly refused to join his "Board of Peace" on Gaza. This escalation follows Trump's demands for a deal over Greenland's sale, which Greenland's Prime Minister Jens-Frederik Nielsen firmly rejected, stating "we will not be pressured."
EU Response:
At an emergency Brussels meeting, France urged deployment of the EU's "Anti-Coercion Instrument"—dubbed the trade "bazooka"—which could impose tariffs worth €93 billion ($108 billion) on the U.S. The instrument allows retaliation beyond tariffs, including financial restrictions, intellectual property measures, and public procurement limits. Germany remains hesitant due to its export dependence.
Market Impact:
- Dow futures indicated a 600+ point drop at Tuesday's open
- European stocks fell broadly Monday
- Safe-haven assets (gold and yen) surged to new records
- Major European sectors at risk: automotive (BMW, Ferrari), luxury goods (LVMH, Hermès), and pharmaceuticals (Novo Nordisk, Roche)
Other Key Items:
- China tightened margin financing rules after record trading activity; benchmark lending rates held steady
- Private credit funds (KKR, TPG, Neuberger Berman) continue raising billions despite mounting warnings
- Japan's PM Sanae Takaichi called snap elections for February 8 to strengthen her coalition before potential March meeting with Trump
- Morgan Stanley identified top-10 stocks for AI-driven memory chip opportunities
The escalating trade tensions threaten wider economic fallout if EU retaliation materializes.
Model Analysis Breakdown
| Model | Sentiment | Confidence |
|---|---|---|
| GPT-5-mini | Bearish | 85% |
| Claude 4.5 Haiku | Bearish | 92% |
| Gemini 2.5 Flash | Bearish | 95% |
| Consensus | Bearish | 90% |