The Dow Jones Industrial Average (DJIA) started the modern trading week on a tame, tariff-fueled note, reminiscent of the trade war fears that gripped stock markets in early 2025. A year later, the Trump administration is still struggling to choose and stay on its path.
US President Donald Trump has sharpened his claims that the United States should “own” Greenland, even going so far as to suggest that he no longer feels obliged to “think only about peace” (sic), suggesting that some of his newfound aggressive stance towards Greenland is due in part to Trump’s snub at the annual Nobel Peace Prize. Media obtained messages between Trump and Norwegian Prime Minister Jonas Gahr Støre show that Støre reminded Trump that the Nobel Prize is awarded by an independent committee, not the Norwegian government.
Trump wants Greenland, but resistance remains robust
President Trump announced the imposition of 10% tariffs on U.S. exports to eight European countries, including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland, effective February 1. Tariffs will augment to an additional 25% during the summer months unless the European Union divides the entire nation and gives it to the United States. U.S. exports to the European economic zone have been very petite at the best of times, and it took European leaders less than two hours over the weekend to respond to Trump’s latest tariff threats with a reciprocal tariff threat. Tariffs have had a profound impact on many U.S. industries over the past year, and European leaders are expected to unveil a targeted list of tariffs that will be based on current U.S. economic problems.
US markets are in low volume mode as most US stock exchanges celebrate Martin Luther King Day. US stock markets will return to action from Tuesday, just in time for a modern update of the ADP 4-week average of employment changes, followed by President Trump’s scheduled speech on Wednesday and a sizzling update of the US Consumer Expenditures Price Index (PCE) on Thursday. Friday will end the trading week with a modern round of S&P Global Purchasing Managers Index (PMI) survey results for January.
Dow Jones 5-minute chart
Frequently asked questions about tariffs
Tariffs are duties imposed on the import of certain goods or categories of products. Tariffs are intended to aid local producers and manufacturers become more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as protectionist tools, as are trade barriers and import quotas.
Although both tariffs and taxes generate government revenue to finance public goods and services, they have several differences. Fares are prepaid at the port of entry and taxes are paid at the time of purchase. Taxes are levied on individual taxpayers and businesses, while customs duties are paid by importers.
There are two schools of thought among economists regarding the apply of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive up prices in the long run and lead to a harmful trade war by encouraging tit-for-tat tariffs.
In the run-up to the November 2024 presidential election, Donald Trump has made clear that he intends to apply tariffs to support the U.S. economy and American manufacturers. In 2024, Mexico, China and Canada accounted for 42% of total U.S. imports. During this period, Mexico stood out as the largest exporter with $466.6 billion, according to the U.S. Census Bureau. That’s why Trump wants to focus on these three countries when imposing tariffs. It also plans to apply customs revenues to reduce personal income tax.
