President Donald Trump escalated his campaign to acquire Greenland at a press conference yesterday, refusing to specify how far he would go to secure control of the Arctic territory while threatening European allies with steep tariffs. The pressure campaign sent global financial markets into a sharp decline as investors weighed the prospect of a transatlantic trade war.

When asked during a White House press briefing how far he was willing to go to obtain Greenland, Trump offered a two-word response: "You'll find out."

The president framed his pursuit of the semi-autonomous Danish territory as essential to American and global security, citing potential threats from Russia and China in the Arctic. "We need it for national security and even world security," Trump said. "It's very important."

Trump expressed confidence that his upcoming meetings at the World Economic Forum in Davos, Switzerland would yield progress. "I think things are going to work out pretty well," he said. "I think something's going to happen that's going to be very good for everybody."

Wall Street Suffers Worst Day Since October

Financial markets reacted sharply to Trump's continued pressure on European allies. The S&P 500 fell approximately 2.1 percent on Tuesday, marking its worst single-day performance since October. The tech-heavy Nasdaq Composite dropped more than 2.4 percent, while the Dow Jones Industrial Average shed roughly 870 points, a decline of nearly 1.8 percent.

The selling erased the S&P 500's gains for 2026, wiping out more than $1.2 trillion in market value. The Nasdaq moved into negative territory for the year.

Investors also sold U.S. government bonds, pushing yields on the 10-year Treasury to their highest levels since August. Higher Treasury yields typically translate to increased mortgage rates and interest charges on personal loans.

Gold rose nearly 2 percent to surpass $4,700 an ounce, reaching a record high. The U.S. dollar fell 0.8 percent against a basket of major currencies.

European markets also declined for a second consecutive day, with Germany's DAX index closing down 1 percent and Britain's FTSE 100 falling 0.7 percent.

Krishna Guha of investment bank Evercore ISI characterized the market reaction as a return of the "sell America" trade, a term coined in April when Trump's initial tariff agenda prompted investors to flee U.S. assets. UBS CEO Sergio Ermotti said he does not "see any path to normalization in the near future."

Tariff Threats Target Eight European Nations

Trump has threatened to impose tariffs on eight European countries that oppose his Greenland plans: Britain, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland. The duties would begin at 10 percent in February and could increase to 25 percent by June if the United States does not acquire Greenland.

The president also raised the possibility of a 200 percent tariff on French wine and champagne after French President Emmanuel Macron reportedly declined an invitation to join Trump's proposed "Board of Peace" focused on Gaza.

Trump publicly shared a private text message from Macron in which the French leader expressed confusion over the Greenland push. "I do not understand what you are doing on Greenland," Macron wrote, while noting areas of agreement between the two countries on Syria and Iran.

Minutes after posting Macron's message, Trump shared an AI-generated image depicting himself planting an American flag on Greenland, with a sign declaring the island "U.S. Territory. Est. 2026."

Treasury Secretary Scott Bessent dismissed critics who characterized the administration's approach as reckless. "Everyone take a deep breath. Do not escalate," Bessent said in a television interview from Davos. "President Trump has a strategy here. Hear him out, and then everything will be fine."

European Leaders Prepare Coordinated Response

European officials have signaled they will not acquiesce to Trump's demands. European Commission President Ursula von der Leyen accused Trump of violating a recent trade agreement and promised an "unflinching, united and proportional" response to any tariffs.

"We consider the people of the United States not just our allies, but our friends," von der Leyen said at the Davos forum. "And plunging us into a dangerous downward spiral would only aid the very adversaries we are both so committed to keeping out of the strategic landscape."

Macron warned that Europe might be forced to deploy its "trade bazooka," an anti-coercion mechanism designed to counter hostile trade practices through retaliatory tariffs and restrictions on foreign investment. European officials have indicated a package exceeding $100 billion in counter-tariffs is prepared.

The European Union has scheduled an emergency summit for Thursday to discuss responses to Trump's threats. Canadian Prime Minister Mark Carney also voiced support for Denmark, stating, "We stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland's future."

Denmark has repeatedly stated that Greenland is not for sale. More than 100 Danish combat troops arrived on the island Monday as part of a broader NATO show of force that includes French, Swedish, and German forces.

Diplomatic Tensions Deepen

Trump's pressure campaign has extended beyond tariff threats. In a text message to Norwegian Prime Minister Jonas Gahr Støre, Trump wrote that he "no longer feels an obligation to think purely of Peace," linking his stance to not receiving last year's Nobel Peace Prize.

Støre confirmed the message's authenticity, noting that Norway's Nobel Committee operates independently of the government. Trump rejected that explanation. "Don't let anyone tell you that Norway doesn't control the shots," he said Tuesday. "It's in Norway. Norway controls the shots."

The president dismissed suggestions that his relationships with European leaders had soured. "When I'm around them, they treat me very nicely," Trump said of Macron and British Prime Minister Keir Starmer.

Some Republican lawmakers have backed Trump's position. Senator Ted Cruz of Texas said it is "overwhelmingly in America's national interest to acquire Greenland," comparing the effort to the Louisiana Purchase and the acquisition of Alaska.

Others have expressed caution. Representative Michael McCaul of Texas noted that the United States could increase its military presence in Greenland without acquiring the territory and warned that an invasion "would strike a war with NATO."

Trump has refused to rule out the use of military force, telling reporters "no comment" when asked directly about that option on Monday. Greenland's prime minister has stated the territory "cannot accept under any circumstances" a U.S. takeover and has requested NATO guarantees against a potential American incursion.