EU readies retaliation for Trump’s Greenland threat

0:03Good morning from the Financial Times. Today is Monday, January 19th, and this is your FT News briefing. America's latest tariff threat is causing the deepest rift in NATO since its founding, and insurers are split about whether U.S. President Donald Trump's action in Venezuela will boost or reduce investor risk. Plus, with so much geopolitical uncertainty, all eyes are trained on the snow-capped mountains of Davos this week. There's a high sense of anticipation. You've got a lot of very important people now coming to Switzerland. So I think there's a very febrile mood at the moment. I'm Victoria Craig, and here's the news you need to start your day.

0:54Outrage has ricocheted across European capitals after President Donald Trump threatened new tariffs on eight of his NATO allies if they do not get on board with his ambition to own Greenland. Trump said starting February 1st, he will impose an additional 10 percent duty on goods from countries including the U.K., France and Denmark. That will rise to 25 percent in June if no resolution is found. On Sunday, Treasury Secretary Scott Bessent explained on NBC News the president's justification. It is a strategic decision by the president. This is a geopolitical decision, and he is able to use the economic might of the U.S.

1:35to avoid a hot war. Trump has repeatedly said the only way to defend Greenland, a semi-autonomous territory of Denmark, is to own it. You're going to have Russia or China as your next-door neighbor. That's not going to happen. But U.K. Prime Minister Keir Starmer called Trump's use of tariffs, quote, completely wrong, and he pledged to take up the matter with Washington. French President Emmanuel Macron has called for the EU, meanwhile, to use its most potent trade weapon and restrict American companies' access to the single market in response, while the EU is readying€93 billion worth of tariffs as retaliation to Trump's threats.

2:18Well, with tensions escalating, Denmark is also seeking to bolster its own relations with Greenland. The country's Export and Investment Fund told the FT it wants to be a, quote, long-term, reliable partner for the Arctic island. The FT's Camilla Hodgson has been talking to its chief executive, and she joins me now to discuss. Hi, Camilla. Hi, good morning. So tell me a little bit about this plan. What exactly does the Export Bank want to do? Denmark's Export Bank wants to invest more money in Greenland, and in particular in the mining and the energy sectors, which is also in large part what President Trump is interested in.

2:54When I spoke to their chief executive last week, he spoke about having a huge appetite to do more on the island and following a kind of keep calm and carry on approach, even in the context of all of this uncertainty and turmoil, as he called it. They talked about having hundreds of millions of euros to deploy this year. And not all of that would be in Greenland, but they did talk about a substantial amount of it going to the Arctic island. And it's likely to be a couple of investments across the minerals and energy sectors. So maybe three to five, and it could be in mining projects or forthcoming mining projects or the energy sector as well.

3:30So, Camilla, what could this investment actually look like in practice? In practice, I think what the bank is looking at is a handful of investments over the year in the mineral sector, possibly also the energy sector. And that would come on top of the four equity investments that they already have there, which includes a couple of miners in the region. Greenland, in principle, is very rich in minerals. There are lots of studies that talk about the various different deposits that might be there, whether it's rare earths, nickel, other metals. But in reality, it's a very difficult jurisdiction to work in.

4:01The weather is very extreme. It's very cold, obviously, for a lot of the year, and that can make it very difficult to do work and causes logistical problems. There isn't always the transport available. There are, I think, two operational mines right now, and there are a bunch of other companies that are developing, doing studies, trying to open mines. but it's really actually quite a small number of operations that are active. Okay, so when it comes to the motivation from the Danish side to all of this, it's not just Donald Trump's threat to acquire Greenland that's fueling it, right? There's also long-simmering tensions that Greenlanders have with Denmark.

4:39Yes, this is a very tense and fairly dramatic situation. Some Greenlanders have felt some resentment towards Denmark because they want more autonomy. There is a movement to be entirely independent of Denmark in Greenland, and I'm sure not everybody wants that, but that is something that has been discussed. And there's also been some resentment, I think, over the idea that perhaps Denmark hasn't spent as much or invested as much in the territory as it could have done. Copenhagen said at the end of last year that it was going to spend billions to not only boost security in Greenland, but also on infrastructure and healthcare.

5:18More investment possibly also means more jobs, a more thriving local economy. And I think that's probably partly what's happening here with the Expo Bank and with other Danish pledges to invest more in the island. So what happens next, Camilla? Would more Danish investment be a kind of deterrent for President Trump's push to own the island? Or what are we watching for in terms of next steps here? I think that's the million dollar question. Everyone is really waiting to see what happens with the talks that are due to take place between the US, Denmark and Greenlandic governments. It has felt like a very dramatic and escalating situation in recent weeks.

5:57And so I think everyone's really just waiting to see what the various governments and authorities do. Another one to keep our eyes keenly focused on, the FT's Camilla Hodgson. Thanks so much for your time. Thank you.

6:15The U.S. capture of Venezuelan President Nicolas Maduro has sparked a surge in demand for political risk insurance across Latin America. Brokers told the FT they're seeing an uptick in requests for coverage against threats such as expropriation, breach of contract, and war in response to the U.S.'s intervention. Private insurers have viewed Venezuela as effectively, quote, uninsurable for more than a decade following a string of oil sector seizures. Insurance brokers said the events in Venezuela had caused companies involved in manufacturing renewable energy and oil and gas to inquire about coverage.

6:50While most insurers have not yet raised prices for the region, one said it is planning increases for projects including critical minerals in countries including Colombia, Mexico, and Nicaragua.

7:08As we've been discussing, the shifting sands of geopolitics are in sharp relief this week, which means there is plenty for global leaders to discuss as they assemble in the Swiss mountain town of Davos. It's where the annual World Economic Forum kicks off today, and although the event has received its fair share of criticism about its relevance, this year's gathering has the potential to make some serious news. That's because President Donald Trump will make his first in-person appearance in six years. The FT's Mercedes Rule is covering this year's forum for us in Davos. Hi, Mercedes. Hello. All right.

7:43So what is the mood like in the Swiss mountain town as the WEF, as it's known, gets underway? I think there's a high sense of anticipation. You've got a lot of very important people now coming to Switzerland. So I think there's a very febrile mood at the moment. There is a sense this could be really great. There are a lot of important people coming. There could be incredible progress on things that have flared up. Iran, Venezuela, more clarity on what happens next with Ukraine. But there's also a sense of chaos because it's Donald Trump. So who knows what could happen? And I think, tellingly, the theme of this year's event is a spirit of dialogue.

8:26And among the key themes are cooperation in a more contested world. Trump is taking the largest ever U.S. delegation we know this year. What is it that he wants to achieve, do you think, out of this next week? I think one thing I'll say, first of all, is that the WEF has always said its biggest selling point is the ability to bring people together. And you can't argue this year they haven't achieved that. So on the corporate side, there's a record number of chairmen and CEOs. I think in total, There are nearly 400 presidents. And then I think in terms of heads of state, more than 60. We have a record number of G7 leaders due to come, including Donald Trump.

9:05He is bringing with him a lot of people like Scott Besson, I think Marco Rubio. Then you've got people like Trump's top Russian negotiator, Steve Witkoff. It feels like they want to dip into all topics. I think it's going to be Venezuela. I think it'll be Iran. I think it'll be Ukraine. I mean, I guess who knows what exactly they want, but they want to be involved with all of the big conversations. Yeah, it seems very much an of-the-moment sort of situation. I'm curious from the other perspective, though, of all the other world leaders who are going to be there. Mercedes, from the conversations you've been having ahead of the event, is there a sense that you have about how they're preparing to have a dialogue with the U.S.

9:47president and his entourage? So my understanding is that Trump arrives Wednesday morning and we're going to get a lot of action on Wednesday when he gives his speech and he leaves the Thursday night. So he's not there for the full week. And I think my understanding is actually that some of these attendances are last minute, for instance, Italy and possibly the UK leaders. I think there's a sense that if you are not here, given what's going to be discussed and what's being planned on things like next steps on Ukraine and what gets drawn up maybe on that, that people need to be there. So Trump clearly a centerpiece of this year's event, even though he's there for just two days.

10:33But I also want to hit on the thing that got him to agree to go in the first place. He wanted assurances that it won't be overtly woke. How is that setting the tone for the week of events in Davos? Well, if you think back to a few years ago, and one of the defining speeches, I can't remember, I think it was possibly 19 when you had Greta Thunberg saying, our house is on fire. Solving the climate crisis is the greatest and most complex challenge that Homo sapiens have ever faced. That was a defining speech and you had maybe some more corporate focus in previous years. I don't think you're going to see things like climate change and greening the environment high on the agenda and seeing famous speeches in that respect.

11:17So, I mean, the UEF maintains that they never changed anything due to Trump's attendance. But I think just by virtue of him being there, I don't think that you're going to see a huge amount of things like the environment or climate change or diversity high up on headlines. No shortage of very big topics to discuss this week, that's for sure. And Mercedes, you and I have only touched the tip of this iceberg. You've done actually a great showcase of the event and its history with my colleague, Michaela Tendera, on our sister podcast, Behind the Money. So we will pop a link in our show notes for listeners who want to take a deeper dive into the Davos backstory.

12:00Mercedes Ruhl, the FT's Switzerland and Austria correspondent in Davos for us. Thanks so much for your time. Thank you. You can read more on all of the stories in today's show for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

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