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Fortune • • general
Key Points:
- France is urging the EU to activate its "anti-coercion instrument" in response to new U.S. tariffs imposed on NATO countries involved with Greenland, following President Trump's plans to take control of the semi-autonomous Danish territory.
- Economists estimate the tariffs would have minimal direct economic impact, slightly reducing GDP in targeted NATO countries and increasing U.S. inflation, but the political consequences could severely damage NATO alliances.
- Europe holds significant leverage over the U.S. through its ownership of approximately $8 trillion in U.S. bonds and equities, making it a major lender that helps finance America's deficits and budget gaps.
- European investors have already begun reducing dollar exposure amid geopolitical tensions, potentially accelerating a shift away from dollar-denominated assets
