The economic fight over Greenland

Summary

Marketplace Morning Report: "The Economic Fight Over Greenland"
Episode Date: January 19, 2026
Host: Sabri Benishour (in for David Brancaccio)

---

Episode Overview

This episode dives into escalating economic tensions around U.S. President Trump's renewed push to purchase Greenland. As the U.S. threatens tariffs against Europe to force a deal, the European Union weighs retaliation, setting the stage for contentious discussions during the World Economic Forum in Davos. The episode also examines related global economic shifts, especially the impact of U.S.-China trade friction on European markets, culminating with insights from economics expert Jay Shambaugh.

---

Main Segments & Key Points

1. U.S. Bid for Greenland Ignites Economic Tensions

Starts: 00:31

• President Trump pushes to purchase Greenland: He hasn't ruled out military force and is now threatening new tariffs on goods from eight European countries unless the U.S. acquisition goes through.
• European Union response: Preparing possible tariff retaliation on U.S. exports; expected to be a major topic at the World Economic Forum.
• "All of this is sure to come up at the World Economic Forum in Davos, which kicks off today." (Sabri Benishour, 00:48)

Notable Quote

• “Basically trying to talk down Mr. Trump and trying to rewind the tape a little bit.”
  — Hosok Lee Makeama, European Centre for International Political Economy (01:34)

• EU considering the 'trade bazooka':

  • A powerful new economic tool allowing the EU to target a wider array of U.S. sectors, including tech and intellectual property.
    “You can go after a whole different set of items rather than just goods, including tech companies and their services and intellectual property rights.”
    — Hosok Lee Makeama (01:53)

---

2. Global Market Snapshot

Starts: 02:08

• Asian markets: Hang Seng down 1%; Nikkei down 0.7% (clarified by Jay Shambaugh at 02:19).
• U.S. markets closed for MLK Day.
• Global wealth milestone:
  • World's billionaires collectively hold $18 trillion—a new peak after a 16% surge in 2025 and 81% since 2020.
  • Stark contrast: 1 in 4 people face food insecurity; nearly half of the global population lives in poverty.
    “One in four people worldwide struggle with food insecurity and nearly half the world's population lives in poverty.”
    — Sabri Benishour (02:44)

---

3. China’s Economic Resilience and Its Effect on Europe

Starts: 04:01

• China’s economic performance:
  • 5% GDP growth in 2025, defying expectations and ongoing U.S. trade hostilities.
  • Record annual trade surplus, despite reduced exports to the U.S.
• Trade diversion:
  • Surplus Chinese exports now flow into the EU and UK.
  • Jay Shambaugh observes a significant redirection: "Tariffs...very much redirect where they are because it's not like we have a flat tariff on everybody. Our imports from China are way down. Europe's imports from China are up a fair amount." (04:52)

---

4. Impact on European Markets

Starts: 05:09

• Currency shifts and inflation:
  • China's low inflation/deflation and a depreciated yuan (RMB) make its goods cheaper in Europe compared to domestic products.
• Risks to European industry:
  • Some imports fill voids; others threaten sectors like batteries, electric vehicles, chemicals, and machinery.
  • European solar panel makers struggle with cheap imports: “Chinese solar panels are very cheap. They're selling them below cost because they've produced far too many.” (Jay Shambaugh, 06:36)

Notable Quote

• “Those are real threats to Europe’s production model.”
  — Jay Shambaugh (06:45)

---

5. EU/UK Tariff Countermeasures

Starts: 07:01

• De minimis loophole closing:
  • EU and UK to end tariff exemptions for small imported packages starting in July.
  • Intended to raise import costs on Chinese goods and plug a tariff loophole.
• Effectiveness depends on size of the new fees:
  • "It will be effective in that it will make the goods more expensive. Whether they'll import a lot less or not depends on how big a fee they put on them.”
    — Jay Shambaugh (07:34)

---

Quotes & Highlights with Timestamps

• “President Trump wants to buy Greenland, though he hasn’t ruled out military force either.” — Sabri Benishour (00:33)
• “Trump and EU leader Ursula von der Leyen are both scheduled to attend the World Economic Forum in Switzerland this week.” — Nova Sappho (01:10)
• “They have the option of a new economic tool...the trade bazooka.” — Nova Sappho (01:45)
• “The longer kind of more systemic shift where Chinese goods overall have been getting cheaper—those are real threats to Europe’s production model.” — Jay Shambaugh (06:39)

---

Key Takeaways

• The U.S. is using tariff threats to push its Greenland agenda, risking a wider trade war with Europe.
• Europe is prepared to retaliate, with the possibility of deploying sweeping new trade measures aimed not just at goods but also tech and IP.
• China is weathering U.S. trade actions by redirecting exports to the EU and UK, impacting local manufacturers and raising new policy responses.
• EU/UK are moving to close small-package tariff exemptions to stem the flow of cheap imports from China.
• Global inequality remains stark, with billionaire wealth at record highs while billions remain in or near poverty.

---

[End of Summary]

Transcript

[Odoo Advertiser]

This podcast is supported by Odoo. Some say Odoo business management software is like fertilizer for businesses because the simple, efficient software promotes growth. Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable. And some describe Odoo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite. So Odoo is fertilizer magic beanstalk building blocks for business Odoo exactly what businesses need. Sign [e-mail] that's o d o o.com.

[Sabri Benishour]

The fight over Greenland is now an economic one From Marketplace, I'm Sabri Benishore in for David Brancaccio. President Trump wants to buy Greenland, though he hasn't ruled out military force either. And now he is threatening to increase tariffs on eight European countries unless they agree to let the US Purchase the Danish territory. The European Union is now considering retaliation with its own tariffs on U.S. products. All of this is sure to come up at the World Economic Forum in Davos, which kicks off today. Marketplace's Nova Sappho has more.

[Nova Sappho]

President Trump over the weekend said he would raise import taxes on goods from eight European countries, including Denmark, Germany and the UK which is not part of the European Union. Trump and EU leader Ursula von der Leyen are both scheduled to attend the World Economic Forum in Switzerland this week. And Hosok Lee Makeama, director of the Brussels based European center for International Political Economy, says the first order of business for EU leaders will be to ratchet down trade tensions.

[Hosok Lee Makeama]

Basically trying to talk down Mr. Trump and trying to rewind the tape a little bit.

[Nova Sappho]

European leaders are also set to hold an emergency summit this Thursday to discuss tougher measures should talks fail. Lee Makayama says they have the option of a new economic tool commonly referred to as the trade bazooka.

[Hosok Lee Makeama]

What it allows you to do is that you can go after a whole different set of items rather than just.

[Nova Sappho]

Goods, including tech companies and their services and intellectual property rights. I'm Nova Safa for marketplace.

[Sabri Benishour]

All right, let's do the numbers. Hong Kong's Hang Seng index closed down 1% today. Japan's Nikkei closed down 7.

[Jay Shambaugh]

10%.

[Sabri Benishour]

U.S. stocks and bond markets are closed today in observance of Martin Luther King Day. Normal trading hours resume tomorrow. But we still got one number for you. $18 trillion. That is the combined wealth of the world's billionaires. That number is the high it has ever been after surging 16% in 2025 and 81% since 2020 this is according to anti poverty group Oxfam, which points out that one in four people worldwide struggle with food insecurity and nearly half the world's population lives in poverty.

[Fundrise Advertiser]

This Marketplace podcast is supported by Fundrise. Billion dollar investors don't typically park their cash in high yield savings accounts. Instead, they often use one of the premier strategies for institutional investors, private credit. Now, the same passive income strategy is available to investors of all sizes thanks to the Fundrise Income Fund, which has more than $600 million invested in and a 7.97% distribution rate. With traditional savings yields falling, it's no wonder private credit has grown to be a trillion dollar asset class. Learn [e-mail] Marketplace the fund's total return in 2025 was 8% and the average annual total return since inception is 7.8%. Past performance does not guarantee future results. Current distribution rate as of 123-120-25 carefully consider the investment material before investing, including objectives, risks, charges and expenses. This and other information can be found in the Income funds [e-mail] fund this is a paid advertisement.

[Sabri Benishour]

China's economy grew at 5% last year. That is despite economic challenges, not least of which is President Trump's trade war. One reason is that China's industries are adapting and that is having spillover effects in the rest of the world. Last week, China reported its largest annual trade surplus ever. That means China is exporting a lot more stuff than it's importing, even though it is sending less stuff to the United States. So where is all that stuff going? Well, more of it is going to the EU and the uk and there are pros and cons to that. Jay Shambaugh is Professor of Economics and International affairs at the George Washington University. Jay, good morning.

[Jay Shambaugh]

Good morning.

[Sabri Benishour]

So tariffs cut down how much we in the US Buy from China, but all that stuff, I guess has to go somewhere, which is everywhere else. How big is this shift?

[Jay Shambaugh]

It's pretty large, especially when you're talking from China. Tariffs don't necessarily change how much you import or export, but they very much redirect where they are because it's not like we have a flat tariff on everybody. Our imports from China are way down. Europe's imports from China are up a fair amount.

[Sabri Benishour]

How is that showing up in Europe? Because, I mean, someone's got all of a sudden decide they want to buy more of this stuff.

[Jay Shambaugh]

So I think you could divide it into two types of goods. So some, I think, is what we might think of as kind of Cheap products that are somewhat disposable goods. Part of it is just over the last three years, the real value of China's currency has fallen quite a bit against the euro. So China has had very, very low inflation, in some cases, deflation in some goods. Europe's price has been rising. So the relative cost of goods has been going up for European goods relative to China. And then the euro versus the RMB has moved in a way that has made Chinese goods just cheaper in Europe than they used to be.

[Sabri Benishour]

Does this pose a threat to manufacturers in Europe or the UK or wherever else all this deluge of products is headed?

[Jay Shambaugh]

There are some goods that transparently, Europe isn't making a lot of right now. And so that really may not be the most important thing. Partly it may just be replacing goods that were coming from Mexico or were coming from Vietnam that are now going to the United States. And I don't think that poses as big a threat. On the other hand, the longer kind of more systemic shift where Chinese goods overall have been getting cheaper and crucially, they've been shifting towards goods that used to be core manufactured goods for Europe that you really do see concerns in Europe in some goods. They may not care. Chinese solar panels are very cheap. They're selling them below cost because they've produced far too many. If Europe wasn't producing solar panels to begin with, they might say, great, we needed some cheap solar panels. On other goods, whether it's batteries or electric vehicles or chemicals or machinery, those are real threats to Europe's production model.

[Sabri Benishour]

The EU has agreed to impose a fee on imported small packages starting in July, and it'll eventually close the loophole that allows, you know, small packages to go in without being tariffed. The UK is going to do the same. Is this going to be effective?

[Jay Shambaugh]

I think it depends on what, what you mean by effective. The whole point of the de minimis exception was if Average tariffs are 2% and the good is $200, it's just not worth the paperwork for the $4. The issue is when we've moved to a world with realistically much higher tariff levels, then that de minimis exemption did become more of a loophole. It will be effective in that it will make the goods more expensive. Whether they'll import a lot less or not depends on how big a fee they put on them.

[Sabri Benishour]

Jay Shambaugh is professor of Economics and International affairs at the George Washington University. Thank you so much.

[Jay Shambaugh]

Thank you.

[Sabri Benishour]

In New York, I'm Sabri Benishour with the Marketplace Morning Report. From apm, American Public Media.

[Kai Ryssdal]

Hey, everybody, it's Kai Rysdal, the host of Marketplace. It has been a year since the fires here in Los Angeles, and businesses that burned are still struggling.

[Jay Shambaugh]

You know, I won't lie. I've looked, I've looked at, you know.

[Odoo Advertiser]

Hey, maybe, maybe we move the store. It wouldn't be the same hardware store.

[Kai Ryssdal]

On the ground reporting and what the year ahead has in store for business owners still recovering. Listen to Marketplace on your favorite podcast.

[Jay Shambaugh]

Apparently.