Donald Trump’s Greenland tariffs are no great blow to Europe

Subscribe to enjoy similar stories. EUROPEANS ARE no longer shocked by the threat of tariffs. They know President Donald Trump regards them as a fee for access to the American market, as leverage for American access to their own and as punishment for perceived slights.

Since his return to office European businesses have war-gamed tariffs and adjusted their supply chains, sales contracts and distribution channels. Currently EU exports to America incur a 15% tariff; British goods are taxed at 10%. The additional 10% levy threatened by Mr Trump on the Nordic countries, Germany, France, the Netherlands and Britain for sending a tiny number of troops to Greenland, is a further nuisance (see chart).

But not much more, so long as escalation is contained. The EU exported an annualised €523bn-worth ($609bn) of goods to America in the third quarter of 2025, about 2.8% of the bloc’s GDP, and imported €360bn-worth. That was down from €547bn a year earlier; imports grew from €336bn.

It is hard to know how much of the decline to pin on tariffs. In any case, Americans appear to be sharing the hit. A study by the Kiel Institute, a think-tank, finds that American importers and consumers absorbed 96% of the current tariffs, while European firms’ prices were largely unchanged.

Quick analysis by the researchers finds that the 10% Greenland tariffs would shave 0.04% from the EU’s output and 0.02% from America’s. Should Mr Trump increase tariffs to 25%, as he has said he will do by the summer if Europe does not consent to his takeover of Greenland, the costs would rise to 0.08% for the EU and 0.06% for America. Hardly a recession.