Irish Deputy Premier Warns US Greenland Tariffs Could Trigger Economic 'Spiral'
Ireland's deputy premier has issued a stark warning that proposed US tariffs on European allies over the Greenland issue could create a "spiral of events" with potentially enormous consequences for global economies and financial markets.
Tánaiste and Finance Minister Simon Harris expressed particular concern about how such measures could fundamentally reshape the transatlantic relationship between Europe and the United States, making it exceptionally difficult to model the precise economic impacts.
Trump's Arctic Ambitions and Tariff Threats
The controversy stems from former President Donald Trump's renewed push to acquire Greenland, the vast Arctic territory currently under Danish sovereignty. During a Wednesday address at the World Economic Forum in Davos, Trump called for immediate negotiations to purchase the territory while explicitly ruling out military force.
However, his administration has simultaneously threatened to impose 10% tariffs on eight European allies, including the United Kingdom, beginning February 1 unless they acquiesce to his Greenland purchase proposal. Although Ireland is not among the eight nations directly threatened, Harris emphasised that tariffs against any EU member state effectively constitute tariffs against the entire bloc.
Modelling the Unmodellable
Harris acknowledged that while economic models can provide some indication of potential damage, they cannot capture the full consequences of a fundamental breakdown in transatlantic relations. He referenced previous analysis suggesting that a 15% tariff could reduce Ireland's economic growth by approximately 1.4% to 1.5% annually over the medium term, potentially resulting in 60,000 fewer jobs created.
"But what those models can't capture is what happens if the transatlantic relationship, as we know it, doesn't exist into the future," Harris cautioned during a press conference at Government Buildings in Dublin. "That in turn could create a spiral of events and retaliatory events across economies and markets."
A Call for Diplomacy and Cool Heads
The Irish finance minister stressed that the period between now and February 1 should be used for intensive diplomatic efforts to find a negotiated solution. He asserted that the European Union would be "failing in our duty and our job" if it did not exhaust all diplomatic avenues.
"We have a period of time from now until February 1 to negotiate," Harris stated, adding that if the US ultimately imposes tariffs, the EU would "respond without delay and in a united fashion."
Harris described the EU as having been "taken aback" by the tariff threats, particularly following the recent conclusion of an EU-US trade agreement. He noted the particular frustration that European officials learned about Trump's changed position through his Truth Social posts rather than through formal diplomatic channels.
Beyond the 'Noise and Threats'
Despite the concerning rhetoric, Harris urged maintaining perspective, describing the current situation as characterised by "noise, statements, threats, vulgarity" in public commentary rather than substantive changes. He emphasised that "nothing has factually changed" regarding Greenland's status or the imposition of tariffs.
"I do want to caveat this, because it is a time for cool heads," Harris advised. "All we have at the moment is noise, statements, threats, vulgarity in terms of some public commentary."
The deputy premier expressed confidence that Trump "doesn't have all the cards" in this geopolitical standoff, noting that he recently met with major US multinational corporations that remain committed to continuing trade with Europe regardless of political tensions.
"I think there's quite a number of twists and turns ahead," Harris predicted. "The intelligent and responsible thing to do is, step by step, and also not just respond to all the noise in the days ahead, but prepare."
He concluded by stating Ireland's immediate priority: "working to make sure that actually the end position turns out to be very different to the Truth Social posts."
