U.S. stock markets are plummeting following President Donald Trump’s announcement of a potential 50 percent tariff on goods from the European Union. The domestic C25 index has already fallen by 1.6 percent after initially showing positive gains.

Trump stated on his social media platform, Truth Social, that trade negotiations between the U.S. and the EU have stalled, leading him to propose the tariff effective June 1st.

Dansk Industri estimates that a previous 20 percent tariff imposed by Trump on EU goods would cost Denmark’s GDP over 60 billion kroner. Peter Thagesen, head of geopolitics at Dansk Industri, believes that a 50 percent tariff would push both Denmark and the U.S. into recession. He expressed his bewilderment at the President’s announcement, highlighting the EU’s efforts to accommodate the U.S., despite facing punitive tariffs on various products.

Thagesen noted the difficulty in understanding the U.S.’s objectives, despite attempts to negotiate. Trump’s tariff policy has been characterized by a series of announcements in recent months, including a temporary suspension of higher tariffs to allow for negotiations with individual countries.

Jakob Ellemann-Jensen, Deputy Director at Dansk Erhverv, advises caution, suggesting that the announcement via Truth Social may be a negotiation tactic to exert pressure on the EU in ongoing tariff discussions.