Prof G Markets – Europe Braces for Trump’s Greenland Tariffs

Date: January 20, 2026
Hosts: Ed Elson (Prof G Markets), Robert Armstrong (Financial Times), Alex Kantrowitz (Big Technology)
Podcast Network: Vox Media

Episode Overview

This episode dives headfirst into the market shock triggered by President Trump’s unexpected announcement of sweeping tariffs targeting European countries in connection with the U.S. effort to acquire Greenland. The hosts dissect the substance and theatrics of Trump’s threat, the economic and geopolitical implications, and the reactions from European leaders. The back half of the episode pivots to the AI business, discussing OpenAI’s move to introduce ads into ChatGPT, how Davos has changed, and the evolving AI competitive landscape. The episode closes with a victory lap on ASML’s stock surge and its meaning for AI supply chains.

1. Tariff Turbulence: Trump’s Greenland Ultimatum

[01:15–11:08]

Key Points

• Market Snapshot & Background

  • 3,000 international leaders set to attend Davos; 300 sex workers expected.
  • U.S. markets closed for MLK Day; S&P and Nasdaq futures sank 1% on tensions over Greenland.
  • Gold and silver hit all-time highs, signaling investor nervousness.
  • President Trump announces 10% tariffs, rising to 25% in June, on eight European countries unless Europe strikes a deal for what he calls the “complete and total purchase of Greenland.”

• Immediate Market Reaction

  • European stocks fall—worst day in two months.
  • Danish officials boycott Davos; extra Danish troops deployed to Greenland.
  • Threatened countries: Denmark, Norway, Sweden, France, Germany, UK, Netherlands, Finland.

• Initial Response from Robert Armstrong

  • Skepticism about whether the tariffs will materialize.

    “The threatened tariffs on any country that trades with Iran have not happened… Is this real strategic boldness, or is this a bunch of talk?” —Robert Armstrong [04:06]

  • Trump’s pattern: bold pronouncements often softened later or not enacted (“taco” — Trump Always Chickens Out).

• TACO vs. FAFO Framework

  • Attributed to Ian Bremmer:
    • TACO: Trump Always Chickens Out.
    • FAFO: “Fuck Around and Find Out”—Trump plays hardball with the weak, backs down from the strong.

      “…the weak get fafo, and the strong get taco.” —Robert Armstrong [06:20]

      • Weak, divided countries get the tough treatment (FAFO); strong, united responses get exemptions or a walkback (TACO).

• European Unity and the “Trade Bazooka”

  • French President Macron pushes for the “anti-coercion instrument,” dubbed the “trade bazooka,” which could retaliate against the U.S.

    “I love the name, ‘declusion instrument.’ It’s like a special axe they keep in a box in Paris or something.” —Robert Armstrong [08:15]

  • Tool would allow the EU to drop fair-trade commitments and impose serious export controls in retaliation.

• Market Sentiment: More Than Just Posturing?

  • Ed and Rob discuss whether Europe will unify or return to historic division and inaction.

    “You haven’t lost a lot of money historically betting against Europe’s ability to put up a unified front…But I think this feels different.” —Robert Armstrong [09:55]

  • A shift in tone from both sides; European leaders feel more provoked than in previous episodes.

2. Davos Dispatch & OpenAI Embraces Advertising

[15:57–25:35]

The Scene at Davos

• Alex Kantrowitz reporting live, calls the atmosphere “very weird” due to:
  • Tensions over Trump’s Greenland maneuver.
  • A shift from corporate altruism to blunt focus on the bottom line, now masked with AI “social good” messaging.

    “They've tried to worm their way back into that social good messaging, mostly by talking about how AI will get us there.” —Alex Kantrowitz [15:57]

OpenAI’s Surprising Pivot to Ads

• OpenAI to test ads for U.S. adult free accounts on ChatGPT—contradicting former CEO Altman’s “ads are a last resort” stance.

  “It looks like that last resort is here.” —Ed Elson [15:57]

• Aims to monetize as AI infrastructure costs balloon ($1.4 trillion investment cited).

Investor and Public Reaction

• Skepticism:

  • “If you really believe you’re close to AGI and big breakthroughs, why resort to the most crude business model on the internet?” —Alex Kantrowitz [17:24]

• Growth Pressure and the IPO Drumbeat:

  • Push to hit 1 billion weekly active users (currently 800 million).
  • Accelerating toward a probable IPO next year.

• Risks:

  • Privacy and trust if ads get “too close to home.”

    “There's no product that knows you better than a chatbot…The second this thing starts pitching things that get a little too close to home… it could get bad.” —Alex Kantrowitz [18:55]

  • The risk of a major scandal—“It only takes one really bad story.”

• If OpenAI Were Public:

  • Stock would “shoot up” on introducing ads due to high margins, despite cultural ickiness.

    “The market would react very positively to OpenAI introducing ads…" —Alex Kantrowitz [20:48]

    • Ed Elson invokes “the ick”: advertising might alienate users, much like Facebook or the infamous “ads aren’t cool” lesson from The Social Network.

Will Users “Get the Ick”?

• It’s a trust issue—if ad targeting feels invasive, users could rapidly switch to other chatbots since data portability is easy.

  “Maybe I'll try the others. And as the context windows get bigger…you ask OpenAI…Copy and paste it, put it into Gemini. Now Gemini's picked up all those preferences.” —Alex Kantrowitz [22:58]

The AI Race Outlook

• Ed: “Who wins AI in 2026—OpenAI, Anthropic, Google?”
• Alex:
  • “Multiple races: OpenAI dominates consumer, Anthropic for enterprise, Google maybe both. But, my money is still on OpenAI.” [25:01]

3. ASML’s Meteoric Rise: Vindication for the Pod

[25:54–End]

• ASML hits half-a-trillion market cap—third European to do so.
  • Makes lithography machines vital for AI chip manufacturing (thus “an AI company”).
  • Stock spike driven by TSMC’s increase in chip capital expenditures. TSMC is ASML’s biggest customer.
  • ProfG Markets previously recommended ASML at $750; now trading at $1,359 (up >80% in 6 months).
  • Hosts take a victory lap and declare ASML a “hold” not a buy.

Notable Quotes & Moments

• “If money is evil, then that building is hell.” —Ed Elson [01:37, about the World Economic Forum]
• “Is this real strategic boldness, or is this a bunch of talk?” —Robert Armstrong [04:06]
• “The weak get fafo and the strong get taco.” —Robert Armstrong [06:20]
• “I love the name, ‘declusion instrument.’ It’s like a special axe they keep in a box in Paris or something.” —Robert Armstrong [08:15]
• “You haven’t lost a lot of money historically betting against Europe’s ability to put up a unified front…But I think this feels different.” —Robert Armstrong [09:55]
• “If you really believe you’re close to AGI… why resort to the most crude business model?” —Alex Kantrowitz [17:24]
• “There's no product that knows you better than a chatbot…The second this thing starts pitching things that get a little too close to home… it could get bad.” —Alex Kantrowitz [18:55]
• “The market would react very positively to OpenAI introducing ads…” —Alex Kantrowitz [20:48]
• “Maybe I'll try the others. And as the context windows get bigger…you ask OpenAI…Copy and paste it, put it into Gemini. Now Gemini's picked up all those preferences.” —Alex Kantrowitz [22:58]

Key Timestamps

• [01:15] Market headlines & Davos setup

• [02:15] Trump’s Greenland tariff threats explained

• [04:06] Armstrong: Analysis of Trump’s history with tariffs

• [06:19] “TACO vs FAFO” framework for Trump geopolitics

• [08:05] Macron’s “trade bazooka” and EU unity

• [09:18] European outrage and consequences

• [11:08] Segment closes

• [15:57] Davos dispatch: The new face of WEF and AI hype

• [16:50] OpenAI introduces ads to ChatGPT

• [18:55] The privacy and trust risks of AI advertising

• [20:48] If OpenAI were public: market reaction to ads

• [22:58] Portability and “the ick” in chatbot loyalty

• [25:01] Alex’s AI race prediction (OpenAI still leads)

• [25:54] ASML victory lap

Summary Takeaways

• Tariff threats: Serious escalation, but likely partially performative—a classic “TACO” situation unless Europe unifies.
• Markets: European equities and currencies tumble in response; precious metals surge.
• Geopolitics: European leaders are more publicly unified and combative than in past crises, but internal divisions may still limit a forceful response.
• OpenAI & AI sector: AI companies are under mounting pressure to monetize, even at the expense of user cool-factor/trust.
• ASML’s boom: Supply chain plays remain critical in AI investing; the pod called this winner early.

For more content, visit Prof G Markets or Ed Elson’s Substack.