Tariffs for territory? How does Trump's "buying islands plan" shake the global financial market?

Author: Changan, Amelia I Biteye Content Team
The U.S. has once again raised the tariff stick, but this time the target is not the trade deficit, but territory. Trump has officially declared war on traditional European allies: using the ownership of Greenland as a condition, he has wielded the sword of tariffs.
For investors, understanding this conflict is not only about seeing through the geopolitical situation but also about protecting their assets amid severe liquidity fluctuations.
This article will deeply analyze how this tariff event will affect every investment decision you make.
1️⃣ Background: From Military Exercises to Tariff Threats
The direct targets of the tariff increase are Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland.
The trigger was the recent deployment of troops from these eight countries to Greenland for Arctic endurance exercises. In Trump's view, Greenland should be America's backyard, and this military presence without his approval is deemed provocative. Thus, he quickly resorted to his most adept weapon - tariffs.
Trump's demand is simple and direct: either sell the island or pay the tax.

• Starting February 1: 10% punitive tariff.
• Starting June 1: Increased to 25%.

The tariffs will only be lifted if an agreement to purchase Greenland is reached.
Currently, Europe is taking a hard stance, with Denmark reiterating that Greenland is not for sale. According to the latest news from Brussels, the ambassadors of the 27 EU countries have held an emergency meeting to discuss retaliatory measures.
The EU holds a list drafted last year, with a total value of up to €93 billion. This list was originally suspended due to last year's trade agreement, but the suspension period is set to expire on February 6, 2026. This means that if Trump acts on February 1, the EU could retaliate within days.
Both sides are currently frantically playing their cards.
Trump is betting that European unity is fragile, and a 10%-25% tariff will be enough to cause internal strife in the European economy, ultimately forcing a compromise.
The EU is betting that U.S. companies cannot afford to lose the European market, pressuring Congress and voters to push back against Trump.

2️⃣ Transmission of Tariffs and Market Repricing
Affected by this news, global markets experienced significant volatility today: Hong Kong stocks fell by 1.05% during the day, and major Asian markets like the Nikkei index generally declined; risk aversion increased, with spot gold rising by more than 2% at one point, reaching a historical high along with silver prices; Bitcoin's price plummeted by $4,000 within two hours, with a daily decline of about 3.6%.
The biggest difference between this Greenland tariff war and previous tariff issues is that it revolves around territorial sovereignty rather than trade issues, making it less likely for the EU to concede easily.
So, what are the differences between this Greenland tariff war and previous tariff wars? Its impact mainly manifests in three aspects:

1. International Trade and Commodity Level: Trump's punitive tariffs on the eight European countries directly cut off the low-cost circulation paths for high-value industrial goods.
   Due to the U.S.'s high dependence on supplies from Denmark, Germany, and other countries in precision instruments, pharmaceuticals, and high-end automobiles, the tariff costs will quickly transmit through the supply chain to the end market, triggering severe input inflationary pressures.
   In this macro uncertainty, global trade volume is harmed, and the safe-haven premium for physical assets is pushed higher, with spot gold and silver prices reaching historical highs driven by this.
2. Liquidity and Interest Rates: Trump's linking of tariffs to territorial sovereignty has disrupted the existing balance of international capital. Under tariff pressure, global trade credit is shrinking, leading to a significant rise in the cost of obtaining dollars in offshore markets; meanwhile, risk aversion drives funds back to the U.S. in large quantities, concentrating on buying U.S. Treasury bonds. This mismatch in capital flows has led to a noticeable regional imbalance in global dollar liquidity.
   Currently, the U.S. Treasury market is experiencing increased volatility. The yield on 10-year Treasury bonds is caught in a fierce battle between safe-haven buying pressure and long-term inflation expectations.
   In the short term, while safe-haven funds entering the bond market can lower yields, as the market begins to digest the inflation risks triggered by tariffs and concerns about the debt burden from large-scale U.S. fiscal expansion, long-term Treasury yields face the risk of a second rise. This opacity in the interest rate environment is weakening the support for high-valuation assets.
3. Cryptocurrency Market: Cryptocurrencies have failed to demonstrate safe-haven properties during this crisis, instead being significantly pressured due to their high correlation with macro liquidity.
   As offshore dollar liquidity tightens, institutional investors, in response to margin gaps in traditional markets, have prioritized reducing their holdings of highly volatile crypto assets. Bitcoin triggered large-scale liquidations after breaking key support levels, causing the total market capitalization of cryptocurrencies to shrink dramatically in a short time, once again exposing their vulnerability in extreme geopolitical turmoil.
   In summary, tariff barriers induce trade shrinkage → input inflation raises interest rate expectations → global dollar liquidity tightens → institutions sell across assets to cover margins, ultimately leading to a crash in the cryptocurrency market.
   3️⃣ KOL Opinions Summary
   Phyrex@Phyrex_Ni (XHunt Ranking: 765)
   Opinion: If Trump really implements the Greenland tariffs starting February 1, it is likely to trigger market expectations of rising inflation again, leading the Federal Reserve to maintain high interest rates for a longer period, which may drive investors to lower their risk appetite and potentially seek safety through asset sales.
   🔗https://x.com/Phyrex_Ni/status/2012961389602857402?s=20
   qinbafrank@qinbafrank (XHunt Ranking: 1533)
   Opinion: The biggest difference between the Greenland tariff war and previous tariff issues is that the core is a territorial sovereignty issue rather than a trade issue. Trump's ultimate demand is to gain long-term control over Greenland's defense and mineral resources through a long-term agreement. The Greenland tariffs have increased uncertainty, which the market dislikes the most.
   🔗https://x.com/qinbafrank/status/2013041531926794415
   The Kobeissi Letter@KobeissiLetter (XHunt Ranking: 1054)
   Opinion: This time, Trump's plan to acquire Greenland is indeed higher than previous demands, and market turmoil may last longer. However, they believe that the best traders will take advantage of the asset price fluctuations brought about by the trade war. Volatility is opportunity.
   🔗https://x.com/KobeissiLetter/status/2012608685462220879
   Deep Tide@TechFlowPost (XHunt Ranking: 652)
   Opinion: Trump has been obsessed with acquiring Greenland since 2019, and this time he has weaponized tariffs against NATO allies for the first time, prompting the EU to consider activating counter-coercion tools for retaliation against U.S. goods, marking a deterioration in transatlantic relations. Bitcoin essentially remains an "American asset" reliant on the dollar system, losing its appeal in the U.S.-EU conflict, while gold and other "stateless" assets become the true safe-haven choice, marking a shift in the international order towards economic nationalism and calling for a "de-Americanization" revolution in cryptocurrencies.
   🔗https://x.com/TechFlowPost/status/2013071438375497963
   Crypto Veteran@Bqlsj2023 (XHunt Ranking: 1519)
   Opinion: An in-depth analysis of Trump's insistence on acquiring Greenland, including its strategic location, control of Arctic shipping routes, missile defense bases, and abundant rare earth and energy resources, while reviewing multiple historical attempts by the U.S. to purchase. The post also predicts that the EU tariff negotiations may last 4-6 months based on the experience of the U.S.-China tariff war, suggesting that the current crash in the cryptocurrency market is a temporary black swan event, advising investors to wait and buy on dips when conditions ease, while emphasizing that this round of market fluctuations will revolve around the tariff war.
   🔗https://x.com/Bqlsj2023/status/2013176823497261390
   The Long Investor@TheLongInvest (XHunt Ranking: 40695)
   Opinion: Trump is using the threat of tariffs as an extreme pressure negotiation tactic (aimed at forcing the EU to sell Greenland), with the real goal of forcing a deal rather than long-term tax increases. The market will replay the fixed cycle of "panic sell-off --- negotiation easing --- rebound to new highs," and investors should take advantage of this artificially created short-term volatility to find buying opportunities amid panic.
   🔗https://x.com/TheLongInvest/status/2012975844948623864
   4️⃣ Biteye Opinion: Response to TACO Action Guide
   A term circulating in the market is TACO (Trump Always Chickens Out). This meme originates from observations of his past negotiation style: although he always starts with extreme tariff threats, when faced with significant pressure from stock market turbulence or domestic interest groups, he often chooses an opportune moment to reach an agreement and declare victory.
   Based on this logic, what signals should we pay attention to?
   1) Focus on safe-haven funds: Before the tariffs are truly implemented, gold and silver remain core assets against geopolitical risks.
   2) Maintain liquidity vigilance: When offshore dollars experience panic, avoid blindly leveraging during liquidity clearing periods.
   3) Look for mispriced assets: Historical experience shows that when the market falls into irrational panic, companies with solid business fundamentals that are mispriced due to macro sentiment often lead the first rebound after volatility.