Following several months of relatively calm U.S.-E.U. relations after the two blocs reached a trade agreement in September, tensions rose again on January 17 when U.S. President Donald Trump threatened to impose an additional 10% tariff on several European countries, including Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom.
The threatened tariffs were related to President Trump’s plan to purchase Greenland from Denmark, which leaders from the affected countries had openly criticized. If enacted, the 10% tariff would have been stacked on top of existing tariffs and implemented from February 1. The tariffs would have increased further to 25% in June if no agreement allowing the purchase of Greenland had been reached by then.
The proposed tariffs caused an immediate pushback from European leaders. On January 21, the E.U. indefinitely suspended the approval of a trade deal with the U.S. and considered imposing retaliatory tariffs covering €93 billion ($108 billion) worth of U.S. goods. These retaliatory tariffs would have been identical to those threatened in May 2025 and would have affected a variety of goods including U.S. automobiles, automotive parts, chemicals, electrical equipment and machinery, and civil aircraft.
However, on January 22, the U.S. walked back its tariff threats tied to European opposition to a Greenland purchase. It remains unclear whether the E.U. will proceed with suspending the trade deal or implementing countermeasures. Several member states have indicated a preference for continued negotiations with the U.S. over retaliation. However, other E.U. officials and French President Emmanuel Macron have signaled that if tensions escalate, the bloc could pursue stronger actions, including potentially invoking its anti-coercion instrument, which could restrict the operations of U.S. technology companies or service providers in the E.U.
U.S. finalizes trade deals with Taiwan and India
After months of negotiations, the U.S. and Taiwan reached a trade deal on January 15. Under the agreement, the U.S. will lower tariffs on Taiwanese goods from 20% to 15%, with sector-specific U.S. tariffs on Taiwanese auto parts, timber, lumber, and wood derivative products capped at 15% as well.
Additionally, the U.S. will increase investments in Taiwan across key sectors, including semiconductors, artificial intelligence, defense, and biotechnology. Taiwanese companies will further be allowed to export semiconductors to the U.S. duty-free up to a quota of 2.5 times their manufacturing capacity currently under construction in the U.S. and up to 1.5 times their finished production capacity in the U.S.
In return, Taiwanese companies committed to investing a total of $250 billion (€215.3 billion) in U.S. industries related to advanced semiconductors, energy, and artificial intelligence. This includes a $165 billion (€142.1 billion) investment by Taiwan Semiconductor Manufacturing Corporation to build four new chip plants in the U.S.
Separately, the U.S. reached a trade deal with India on February 2. Under the agreement, total U.S. tariffs on Indian goods will be reduced immediately from 50% to 18%. This includes the elimination of a 25% tariff related to India’s purchases of Russian oil, while a separate 25% reciprocal tariff will be lowered to 18%.
According to President Trump, India committed to halting purchases of Russian oil and to increasing imports of American oil, with the possibility of also buying Venezuelan oil. President Trump further stated that India would move toward reducing tariffs and non-trade barriers on U.S. products to zero and would purchase $500 billion (€423 billion) worth of U.S. energy and agricultural products. However, there has been no official confirmation from the Indian government that these are the agreed terms, and few details have been specified regarding how the deal will be implemented.
The agreement comes just days after India concluded a free trade agreement with the E.U. That deal is expected to eliminate or reduce tariffs on most goods traded between the two blocs, including Indian machinery, chemicals, pharmaceuticals, and agricultural products, as well as automobiles manufactured in the E.U.
U.S. threatens new tariffs on South Korea and Canada
On January 26, President Trump threatened to increase reciprocal tariffs on South Korea from their current rate of 15% to 25%. The tariff threat followed legislative delays in South Korea’s ratification of the U.S.-South Korea trade deal. President Trump threatened to increase tariffs immediately but has not issued an executive order formalizing the change at the time of writing.
Additionally, on January 24, President Trump also threatened a 100% tariff on Canadian imports due to a new trade agreement between Canada and China. Under the Canada-China agreement, Canada will allow imports of 49,000 Chinese electric vehicles at a tariff rate of 6.1% with the quota set to gradually increase to 70,000 vehicles over the next five years. In return, China will significantly reduce tariffs on Canadian canola from 84% to a combined rate of 15% and will remove its anti-discrimination tariffs on Canadian canola meal, lobsters, crabs, and peas.
Following the trade deal, President Trump cited concerns about the transshipment of Chinese goods through Canada as a rationale for the 100% tariff threat. It is currently unknown when this tariff could come into effect.
U.S. threatens tariffs on countries sending oil to Cuba, possibly targeting Mexico
On January 29, President Trump has declared a “national emergency” over alleged threats from Cuba, claiming that the country has hosted Russian and Iranian personnel to conduct espionage against the U.S. He also threatened to impose tariffs of an unspecified amount on any country that supplies oil to Cuba. This proposal has been widely seen as targeting Mexico, which has provided fuel shipments to Cuba in recent months, although such shipments reportedly stopped in early January.
Mexican officials have declined to publicly outline how they would respond to potential U.S. tariffs, noting that fuel deliveries are considered an important form of humanitarian assistance for Cuba but emphasizing that Mexico must prioritize its own domestic needs. Venezuela had previously been Cuba’s primary fuel supplier, but those shipments ended after the U.S. deposed President Nicolás Maduro in early January.
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