Global investors rushed toward safe haven assets on Monday, sending gold and silver to record highs, after fresh trade war fears rattled stock markets worldwide. The trigger was a renewed warning from former US President Donald Trump, who threatened tariffs against several European nations amid a dispute over Greenland.
Trump has reignited geopolitical tensions by repeating his claim that the United States should take control of Greenland, citing national security concerns. Over the weekend, after talks failed to resolve what he described as a “fundamental disagreement” over the Danish autonomous territory, he announced plans to impose new trade penalties.
According to Trump, the United States would levy 10 percent tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting February 1. These tariffs would rise to 25 percent from June 1 unless the countries agreed to his proposal.
The response from Europe was swift. In a joint statement, the affected nations warned that tariff threats could seriously damage transatlantic relations and risk pushing both sides into a dangerous economic spiral.
The announcement also cast doubt on a trade agreement signed last year between the United States and the European Union. German Foreign Minister Johann Wadephul said the deal appeared unworkable under current conditions. In France, aides to President Emmanuel Macron indicated that Paris could urge the EU to activate its “anti-coercion instrument,” a powerful and rarely used measure designed to counter economic pressure from foreign governments.
This instrument would allow the EU to restrict imports of goods and services into its 27-member market, which serves around 450 million people. Reports suggested EU member states were already discussing possible retaliatory tariffs on up to 93 billion euros worth of US goods.
Markets reacted sharply to the growing risk of a major trade confrontation between global economic powers. Safe haven assets extended gains that had already been supported by recent geopolitical tensions involving Iran and political developments in Venezuela.
Gold climbed to an all-time high of US$4,690.59, while silver surged to US$94.12. In contrast, equity markets across Asia largely declined, with losses seen in Tokyo, Hong Kong, Shanghai, Sydney, Singapore, and Wellington. Seoul and Taipei were among the few markets to record gains. European and US futures also pointed lower.
Currencies reflected the shift in investor sentiment, as the US dollar weakened against major peers. The euro, British pound, and Japanese yen all strengthened.
Market strategists cautioned that the situation could worsen if political threats turn into concrete policy action. Analysts noted that even if the immediate tariff dispute is negotiated down, the broader risk of fragmented global trade, politicized supply chains, and rising uncertainty for businesses and investors remains high.
Meanwhile, economic data showing China’s economy grew five percent last year drew little reaction, as investors focused instead on the sharp slowdown in growth during the final quarter. Markets in Seoul and Taipei also appeared to shrug off warnings from US officials that Asian chipmakers could face steep tariffs if they fail to expand manufacturing operations in the United States.
