Further market volatility to come – even if Trump backs down on Greenland tariff plans says Rathbones’ Wyn-Evans

January 19, 2026

Given the extraordinary weekend news of Donald Trump announcing his intention to use tariffs against certain countries, including the UK, supporting Denmark’s stance on Greenland, pressure has been stepping up in all sorts of ways.

Rathbones’ Head of Market Analysis has shared his analysis of the situation, saying that further volatility likely, even if Trump withdraws threat of tariffs around Greenland plans. Whilst in this case, the political implications appear to be greater than the economic ones, the halt to an integrated world signifies new future for markets and investors as John Wyn-Evans, Head of Market Analysis at Rathbones, assesses in his comment below:

“President Trump’s threat to impose tariffs on eight European countries over their refusal to back his bid to acquire Greenland is consistent with his habit of using trade as leverage. Markets have reacted negatively, and while past episodes suggest he often retreats when economic costs build, further volatility is likely.

“The proposed 10% tariffs from February, rising to 25% in June, have an uncertain legal basis with the Supreme Court set to rule on the administration’s emergency tariff powers, which may render much of this bluster as just that.

“But the economic impacts are not to be underestimated. A 10% tariff could shave around 0.1% off GDP for the most exposed economies, notably the UK and Germany, while a 25% rate could hit output by 0.2-0.3%. For the US, the measures would add around 0.1-0.2 percentage points to inflation, though recent experience shows these effects can be partially offset. The EU, meanwhile, is reviewing a €93bn package of potential retaliatory tariffs and could restrict US corporate access to its markets.

“The political ramifications are greater. Any attempt to coerce Denmark or force a transfer of Greenland would severely damage transatlantic relations and strain NATO. Greenland’s strategic importance – from early‑warning defence to control of Arctic routes – helps explain Washington’s posture, but sovereignty is not negotiable. Limited security concessions may be possible, but any broader deal remains speculative.

“Ultimately, this episode reinforces the shift away from ever-increasing global integration and toward a world defined by sharper spheres of influence – a reality businesses and investors must increasingly plan for and deal with.”