Europe, Trump & the Limits of Trade Escalation | Macro Mondays: January 19, 2026

0:00Thank you.

0:30Mikkel Rosenvold:I bring the best guests in the world at that nexus of understanding of macro, crypto, and the exponential age of technology. If you're enjoying the show, a quick five-star rating goes a long way. It helps us grow and keep these conversations coming with the best guests in the world. Thanks a lot. Hello out there. Welcome to Macro Mondays at Real Vision. My name is Mikkel Rosenwald, and I'm very excited to host this show once again. with me as usual Andreas Dino welcome to the show Andreas

1:01Andreas Steno:thanks Michael it's been quite the weekend here in the north of Europe I have to admit so let's have a discussion around what's next

1:12Mikkel Rosenvold:these are very very special times let's just get the elephant in the room Andreas Dino it's very very special times to be Danes on an American platform here but we're doing fine we're going to Miami on Wednesday we're very much looking forward to that. And yeah, still having a lot of fun, doing some great stuff here at Real Vision. So let's try and keep things separated. But obviously we do have to talk real and Andreas. It's affecting everything and we'll get all around that. But also try and talk a little bit about the broader macro picture at Play Andreas. Before we get to that, remember guys that this is our free show at Real Vision, our free weekly macro insight show to give you a sneak peek into our thinking and our analysis.

1:56Mikkel Rosenvold:To get the full picture, to get our flagship reports and our access to our model portfolio, you have to sign up for Real Vision Pro at realvision.com. Lots of good stuff in there, including our weekly catch-up with Role Pal on Friday. Great show. You can catch that as well with the approach here at Real Vision. So I really recommend that. Even though, Andreas, we've had a great start with our model portfolio so far. We'll get back to that a little bit later. we have to issue our regular reminder here that we try to be very actionable. We try to be very concrete in our recommendations, but they may be...

2:33Andreas Steno:Sometimes it may be good, sometimes it may be shit.

2:38Mikkel Rosenvold:Exactly. That's the way it is and always has been, Andreas. So we don't have any trading in US markets today, Andreas, but we all obviously have futures and we have European markets opening up in crypto, etc. looks like it's going to be quite a heavy start to the week, mainly due to Greenland? Or how do you view that, Andres?

2:58Andreas Steno:Yeah, I guess it at least is a partial explanation behind what we've seen. We have metals flying. We have Bitcoin sliding down. We have equity futures down, et cetera. But over the course of the very early trading between Sunday and Monday, our time here in Europe. We obviously also had a message out of Japan on the upcoming election, right? And the Japanese yield curve responded. If you look at the 30-year yields, I think they're up like 12 basis points, something like that. So it's a pretty nasty move. And that's probably also at least partially behind what we see in everything from equities to metals, et cetera.

3:48Andreas Steno:So it's actually a little bit hard now that we don't really get to see what the US crowd will do until tomorrow, right? And I'm kind of tempted to say that it's driven by both, both the Japanese election and this Greenland story. For now, I'm also tempted to say that we remain in a tit-for-tat bureaucratic semi-escalation. I don't really consider it overly worrying at this juncture, the tit-for-tat escalation between the US and the EU. But obviously, there are some scenarios that could bring us in a worse direction. And my fingers are crossed that we're not going there, but I mean, I don't think it could be ruled out at this juncture.

4:44Mikkel Rosenvold:Oh, not at all, Andreas. Let's do a little bit of a recap here, just to understand the Greenland and terrorist situation. So last week, the Danish foreign minister went to Washington, had a meeting with Rubion Vance. He tried something very Scandinavian, very European, to establish a working group to address this issue. the two sides weren't quite in agreement on what this working group would do but that's sort of the point you you put a bunch of people together and I think what the EU and Denmark is trying to do here is to pull it down the hierarchy as much as possible because dealing one-on-one with Trump is very very tricky dealing one-on-one with Vance is almost as tricky but once it gets further down the chain, maybe even to career diplomats in the US Secretary of State, it's easier for Europe.

5:38Mikkel Rosenvold:They're more used to dealing with these kind of people than the MAGA politicians. And I think that that's what the Danish tried to do there and tried to set up sort of a bureaucratic process that you can discuss details and numbers and technicalities. Obviously, Trump has no patience for this, so he grabbed into his toolbox and grabbed out the tariff weapon. And I just wanted to say before we get into that, Andreas, the positive reading here is I would rather be hit with a tariff than with a cruise missile. That's the silver lining here. We're not talking about war anymore. I know it's not off the table, but we're not talking about invading Europe or whatever.

6:20Mikkel Rosenvold:we're talking about a trade war, which is much, much better than an actual war. None that else address a broad tariff on 10 % on various European countries, which in essence means the European Union, to be raised to 25 % along the way. How serious is this for global markets if it becomes a reality? Yes.

6:43Andreas Steno:So let me start by saying that even if I agree with you that a tariff war is obviously better than an outright war. I don't really think anyone dare to even think about that, even though it's been rhetorically explicitly mentioned. Most people consider that negotiation leverage and so on and so forth. I do that as well. I consider the actual risk of that blown extremely out of proportion. but in any case if the market actually feared that war and this was seen as a de-escalation we would probably have seen a positive reaction today we didn't get that ultimately

7:28Andreas Steno:I don't think the market is super scared of the 10 % I think the market is scared of what might come if we get this tit-for-tat reaction this chain reaction where it goes back and forth as we've seen between the US and China a couple of times back in 2025, right? Remember how they went from, I don't even, we didn't get to four digits, did we? Between the US and China,

7:54Mikkel Rosenvold:but it was close to at some point.

7:56Andreas Steno:We got above 300 as far as I remember and then we backed down again. But it was this back and forth, back and forth. And every time one part up the game, the other part up the game immediately after. I don't consider it likely that it will, resemble that, what we're going to see between the EU and the US. First of all, since the EU is not an institution that can take decisions that fast, it's simply difficult for the EU to respond to terrorists by just tweeting something out and saying, okay, we'll match that. They cannot do that. They have to vote and they have to talk to each other and all that.

8:32Andreas Steno:And this is called the anti-coercion mechanism that they call it the EU basooka when they're faced with a foreign threat on trade, for example. It is actually, as far as I understand, designed to be fairly slow because they don't want to incentivize this tit-for-tat where you've raised the bar on a running basis between the two combating forces, right? And then, I think you mentioned that initially, Mikkel, to begin with. My personal base case is that Trump is not even capable of adding the 10 % by 1st of February, at least not a broad 10%. He'll have to narrow it down to be able to use the national security argument.

9:21And therefore, to be honest,

9:24Andreas Steno:my best guess is that we'll probably get a rhetorical response from the EU saying that they have a package prepared in case that those tariffs go live the 1st of February. And then from there, they'll try to breathe easy and try to drag this out. I don't think we should expect an episode that kind of resembles what we saw between the US and China last year, because the EU is not that kind of institution. So a quick break in your regular programming.

9:52Mikkel Rosenvold:If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. Andres, we discussed this a lot over the weekend and today as well, you and I. I just wanted to show you this, a list of four potential U.S. or EU responses. So in the top is the lightest one, the classic tariff retaliation, we've called it. That's probably going to happen. Reciprocal tariffs or what you might call it. that shouldn't be too much of a worry for investors because that's subject to negotiation, etc.

10:39Mikkel Rosenvold:The next is a, it shouldn't say digital sales, a digital services sales tax. That would be a step further if the EU decides to hit the MAX 7 because the first step, the classical terror retaliation, would usually be aimed at something like Harley-Davidson motorcycles and bourbon and whatever, Levi's jeans, and those sort of symbolic things. But to hit the MAX 7 with a heavy sales tax could be something. We could be looking at an export ban on microchips from ASML. And then, obviously, the big one could be something like a ban on owning U.S. assets within Europe in some way, shape, or form. We're very, very far from those points, but those are steps to look out for, as you understand the EU response and how significant this is, in my opinion.

11:26Mikkel Rosenvold:So do you think we'll stay at the top tier right now? Or what's your assessment here?

11:33Andreas Steno:I think it would take a lot, let me emphasize a lot, for us to go below step one. Even a digital sales services tax is something that wasn't even close to being implemented during the first part of this trade war back in 2025. It was not on the table during the first Trump presidency either. So it's something that they'd like to avoid. You could argue that they already have a light digital services sales tax in place with all of the fines that they provide these Max 7s with in the Eurozone anyway. But, you know, joking aside, that is, I believe, the only out of the three others that could feasibly happen, which is probably also why we saw this reprising of NASDAQ from the get-go of the futures trading, right?

12:27Andreas Steno:Because, I mean, it's fair to price in the probability of a digital services sales tax in the euro zone as a response to this. an export ban on on ASML products it's not a targeted measure against the US so I think that will be very difficult and then a ban on holding US assets well you would need to make it a ban because you know I hold a lot of US assets you do hold some US assets as well yourself right so it's clearly not something you've managed to convince people of you know doing just by watching the geopolitical play last year, right? No. It's something you'll have to force people to do because a lot of Europeans hold many US assets.

13:12Andreas Steno:The Eurozone, I think including UK, but the old EU, let me put it like that, holds roughly$8.23 trillion assets, which is more than twice the rest of the world altogether. So, I mean, this is obviously the nuclear bomb that you could use. But, you know, hopefully we're not getting there. And I consider it incredibly unlikely that we put it like that. Yeah. What I'd like to ask you about, Mikkel, is that, you know, I've kind of had the impression, say, over the past day or two, that Trump is usually trying to figure out where is the exact red line. You know, one thing is that the Danes said it, but he's a cynical guy.

14:03Andreas Steno:So he probably wants to test whether the Frenchmen, whether Keir Starmer will back down and so on and so forth. But we know that the Frenchmen and also the Brits, they have pretty vested interests in defending territorial interests next to the US, if you know what I mean, with several islands included in both of those countries. So how do you see this from a political perspective outside of Denmark? One thing is the Danish stance, but what about the French, the British stance, the German stance on this?

14:36Mikkel Rosenvold:Right now, we have an almost completely united European front on this issue. At least all the major European military economies are united on this. There may be some wrinkles on Italy and Meloni's support to this, but that's relatively minor for now. And even so, if they activate the anti-coercion mechanics, you don't have to have all the votes. and that doesn't have to be unanimous. So that can be worked around. The big question here is what screws could Trump turn? Because tariffs, it's not going to be enough to break up this united front he's facing in Europe. It would probably have to include either LNG, natural gas, which a lot of the European countries, the further you go to the south and the east, they're usually more reliant on that.

15:27Mikkel Rosenvold:And we're trying to wean ourselves off Russian gas. So if we can't also can't have U.S. gas, if they shut off, what on earth are we going to do? And the Europe is very, very, that's essentially our biggest Achilles heel is that we don't produce any energy ourselves. So that is one step that the U.S. could take to really put the pressure on Europe. It's also very, very hard to move back from. It would break a lot of trust with the European Union. But it is a step that could be taken. Other than that, we are seeing a very, very strong united European front. We are seeing European military advisors going to Greenland last week.

16:04Mikkel Rosenvold:There was a lot of fake news about these guys fleeing Greenland once Trump issued the threat of terrorists. Let me just say that that's completely fake news. These were not soldiers meant to jumping in a ditch and shooting. These were guys with laptops going up there for a meeting and going back. So that was always the plan. the plan is not to put 100 ,000 soldiers in Greenland because Greenland is so massive what on earth would they be defending the idea is to start having some talks within Europe and within NATO on what can be done to defend Greenland better in the future what could such a package look like we've covered that a bit, there are some investment ideas into that because at the end of the day I think the most realistic outcome of this is increased investments in the defense of Greenland And we've talked about ships.

16:54Mikkel Rosenvold:We've talked about drones. One thing that was mentioned to me earlier today was the Golden Dome radar network that Canada is investing heavily in and has been using as a way of easing Trump's rage against Canada. That could be a wave and some massive investments in that over Greenland would make a lot of sense. So, I mean, there are some ways to this, but the fundamental issue is still that Europe and Denmark considers Greenland as something that can't be sold because the Greenlandic people decides this issue. And they don't want to join the US, so Denmark and Europe doesn't think that Greenland can't be sold.

17:34Mikkel Rosenvold:And on the other hand, the US is looking for a price to something that can't be sold. And that is, at some point, these parties are going to have to talk the same language if this is to be resolved. But, Mikkel, I don't know how to phrase it,

17:48Andreas Steno:but maybe it can actually be bought, if you know what I mean. Because, you know, if I were to, you know, one thing that I continuously see the US side of this misunderstanding is that they have to talk to Denmark. Yeah, exactly. In principle, they could go directly to the Greenland people and say, what's the price here?

18:11Mikkel Rosenvold:Yeah, and they should. And I mean, the Greenland people are not going to be faced by, not going to be worried about tariffs on the EU and all these measures against the EU. That doesn't matter. They want independence and they don't see a path to independence through the US. So they would have to be convinced otherwise. Right now, they're very, very explicitly wants to stay as a part of the Kingdom of Denmark. that's not because they love it in our kingdom, to be honest, Andreas, but they prefer that to the U.S. And that's sort of – Trump hasn't sold the idea on joining U.S. to the Greenlandic people, simply.

18:44Mikkel Rosenvold:And that's the key point because if he had managed to do that, if the Greenlandic people wanted to join the U.S., a deal could absolutely be made.

18:52Andreas Steno:But the simple bottom line, and maybe that should be my final words on this Greenland question for now, is that it is incredibly gullible to think that these 50 ,000 people can decide for themselves some of the biggest island on earth. It's not going to happen.

19:08Mikkel Rosenvold:True. They don't have a free range of options, but they do have some level of self-determination. Obviously, they can choose to be a Chinese puppet. But, yeah. Anyway, that's where the current misunderstanding is, and that's why we don't see real negotiations, because the two sides are talking completely different languages right now.

19:28Andreas Steno:Yes.

19:29Mikkel Rosenvold:So, okay, Andreas, maybe that's enough about Greenland. It's a very contentious topic. I know it's difficult for us to sit here as Daines, but we're trying to be as objective as possible and laying out the way we see it as analytical as possible. Let's talk a little bit macro, Andreas. We published, in my view, a very good article on Friday looking into the CapEx picture of 2026. And we cover this in our comprehensive outlook for 2026 as well. But it seems like we are getting some fuel to that fire with the depreciation rules, etc. going on. What is it that you're seeing that makes you so upbeat on this capex season, as it's been called?

20:14Andreas Steno:And so, you know, outside of getting this punch to my face, so to speak, not literally speaking, but you know what I mean, over the weekend with this Greenland stuff, I was so upbeat on Friday because, you know, everything started to line up. and the stars were aligning for this super capex cycle this year we've had strong regional pmi data on capex which is you know it's hand in glove with my thesis that basically as of today you're incentivized to to do a lot of capex this year due to this change in tax rules and it's by the way only this year so it's getting designed to make the economy fire on all cylinders ahead of the midterms, right?

21:02Andreas Steno:And then on top of it, we're also seeing this rotation beneath the hood that kind of supports the notion that there is actually a cyclical uptick on the way. We've seen, I think, 10 sessions in a row with small caps outperforming large caps. It's typically not something we see unless the economic cycle is doing very well. And the good news, the piece of good news here is that But most cycle-sensitive assets, take the Russell 2000, take Bitcoin, they're priced for what I would call mediocrity. If you look at it year over year, in the dark blue here, we're basically priced-ish around an ISM manufacturing cycle that doesn't really move a lot, which has been the case three years running.