The announcement from former US President Donald Trump regarding potential 50% tariffs on goods from the EU has triggered a significant downturn in stock markets, both internationally and domestically. The C25 index in Denmark, for example, experienced a 1.6% drop after Trump’s announcement, reversing earlier positive gains.

Dansk Industri (Confederation of Danish Industry) estimates that a 20% tariff imposed by Trump on EU goods could cost Denmark’s GDP growth over 60 billion kroner. Peter Thagesen, head of geopolitics at Dansk Industri, believes that a 50% tariff would likely plunge both Denmark and the US into recession.

Trump stated on Truth Social that trade negotiations between the US and the EU are not progressing and suggested implementing a 50% tariff on goods from the EU starting June 1.

Thagesen expressed his confusion over the president’s announcement, stating that the EU has been accommodating towards the US, even in the face of punitive tariffs on cars, car parts, steel, and aluminum products.

Jakob Ellemann-Jensen, deputy director at Dansk Erhverv (the Danish Chamber of Commerce), urged caution, suggesting that the announcement via Truth Social may be a negotiating tactic to pressure the EU in ongoing tariff negotiations.

Trump’s approach to tariffs has been marked by numerous announcements in recent months. In April, he announced tariff rates of ten percent on all imports to the US and higher tariffs for specific countries and areas, including 20 percent tariffs for most EU goods. However, the higher tariff was temporarily suspended to allow for negotiations with individual countries.