Greenland Controversy Subsides

U.S. stock markets closed broadly higher on Tuesday (local time) after President Donald Trump ruled out military action to acquire Greenland. The S&P 500 index rose 1.16% to close at 6,876 points, while the Nasdaq climbed 1.36% to 25,327 points and the Dow Jones Industrial Average gained 1.21% to end at 49,077 points.

President Trump eased some market anxiety by excluding the possibility of using military force to acquire Greenland. However, gains were limited as the Danish government immediately rejected any negotiation over ceding Greenland.

Tariff Implementation Abruptly Postponed

The situation shifted dramatically after market close. Following a meeting with NATO Secretary General Mark Rutte, President Trump announced that a negotiation framework had been established regarding the Greenland issue and postponed the tariff implementation scheduled for February 1st.

The dollar strengthened immediately after this announcement. Currency markets interpreted the tariff postponement as a signal of easing trade tensions between the United States and the European Union (EU), reducing safe-haven demand.

Meanwhile, U.S. Treasury prices rose. Bond markets viewed the Trump administration's withdrawal of tariff threats against the EU as a retreat from global trade conflict concerns.

EU Indefinitely Postpones Trade Agreement Ratification

The EU's response remains cautious. Bernd Lange, a member of the European Parliament's Committee on International Trade, stated that "the U.S.-EU trade agreement has been frozen indefinitely," adding that "this is a matter of our sovereignty and territorial integrity." The European Parliament has postponed the ratification vote on the U.S.-EU trade agreement.

France postponed a Group of Seven (G7) meeting scheduled to discuss U.S. tariff threats until next week. While Bloomberg cited scheduling conflicts with the Davos Forum, the postponement is widely interpreted as an effort to secure time to formulate responses to U.S. trade pressure.

UK Chancellor of the Exchequer Rachel Reeves kept the door open for retaliation against U.S. tariffs, stating "nothing can be ruled out." However, she added that "reducing trade barriers is the goal" and expressed confidence that the U.S.-UK trade agreement signed last year could be maintained.

Scott Bessent's Assessment of China Negotiations

U.S. Treasury Secretary Scott Bessent stated that he had "positive discussions" with Chinese Vice Premier He Lifeng this week regarding the implementation of economic agreements between President Trump and President Xi Jinping. Secretary Bessent added that he looks forward to additional meetings with Vice Premier He.

Meanwhile, the European Parliament voted to refer the EU-Mercosur (South American Common Market) trade agreement to the European Court of Justice (ECJ).