North Carolina’s economy would be negatively impacted by the $108 billion in retaliatory tariffs threatened by the European Union in response to President Donald Trump’s threatened tariffs to pressure the sale of Greenland to the United States, say economists.
Trump made this announcement on Jan. 17 in a Truth Social post; and the EU, on Jan. 18, threatened retaliatory tariffs to pressure Denmark into selling Greenland to the US.
“The European Union’s response confirms that tariff threats are no longer abstract — they are beginning to shape real economic behavior,” Donald Bryson, CEO of the John Locke Foundation, told the Carolina Journal. “Last week’s John Locke Foundation study examined how retaliation by major trading partners can affect North Carolina, particularly because so much of our agriculture depends on export markets. When retaliation is signaled, it doesn’t matter which country buys which crop; reduced global demand leads to lower prices nationwide. That mechanism places export-dependent sectors like cotton, tobacco, pork, and sweet potatoes at particular risk in North Carolina.”
According to the Truth Social post, starting on Feb. 1, Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland will be charged a 10% tariff on all goods shipped to the United States. The tariff will increase to 25% on June 1; according to the post, it will remain in effect until an agreement is reached on the purchase of Greenland.
“The Trump administration has argued that acquiring Greenland is a national security necessity to counter China and Russia, a view that many European governments have rejected,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. “In response, the administration has threatened a 10% tariff on imports from several European countries beginning in February, with the rate rising to 25% this summer if no agreement is reached. European officials have said they are prepared to respond with substantial counter-tariffs, potentially targeting more than $100 billion in US exports. An intensified tariff escalation of this nature would risk turning a political dispute into a broader economic shock.”
Trump has stated that the US taking control of Greenland is necessary to counter Russia and China, according to a Wall Street Journal report. It remains unclear whether the new tariffs announced by Trump would be stacked on top of existing tariffs, which currently stand at about 15% for most EU goods and 10% for most UK goods.
“While tariff threats are not new for Trump, viewed alongside recent US actions in Venezuela, this episode suggests a willingness to use trade and economic pressure — alongside other tools — to pursue strategic objectives across the Western Hemisphere,” concluded Harris.
