European Tariffs Canceled as Trump Reaches Greenland Agreement

President Donald Trump announced on Jan. 21 that he’s canceling threatened tariffs against several European Union countries that were set to take effect on Feb. 1. As a result, crypto traders find relief in the news as prices start to recover.

The reversal came after Trump said a framework for a future agreement involving Greenland and Arctic cooperation was reached following discussions with NATO Secretary General Mark Rutte at the World Economic Forum in Davos, Switzerland.

A Notable Shift in U.S. Trade Policy

Earlier in January, Trump had announced plans to impose 10% tariffs on imports from eight European allies – including Denmark, Germany, France, and the UK – beginning on February 1st.

As a result, the move drew strong criticism from EU officials, prompting actions such as the suspension of a key EU – US trade agreement by the European Parliament. Additionally, this disagreement raised concerns about potential retaliatory tariffs.

On Wednesday, January 21st, Trump confirmed the tariff threat would be withdrawn, emphasizing that further negotiations would take place on the Arctic-focused arrangement.

Additionally, the U.S. reiterated that it would not resort to military action in pursuing its strategic interests in the region. Seeking to reassure global partners amid diplomatic tension.

What the Tariff Reversal Signals for Crypto

The cancellation of the proposed EU tariffs represents a de-escalation in one of the most heated transatlantic trade disputes in recent months. An important development given that the EU and the U.S. represent two of the world’s largest economic regions and major trading partners.

In the past, tariff tensions resulted in broader market uncertainty and disrupted supply chains, given the scale and integration of bilateral trade flows.

For crypto markets, the tariff rollback provides a short-term relief from geopolitical risk. Indeed, when tariff threats escalate, risk assets often suffer heightened volatility as investors reassess global growth outlooks.

In the aftermath of Trump’s reversal, markets saw signs of mild relief to the upside as risk sentiment improved. Therefore, the price of Bitcoin managed to recover the $90k level.

From a technical perspective, reduced geopolitical tension can ease risk-off flows that typically push capital into traditional safe havens. Crypto assets may benefit if risk sentiment stabilizes, even if broader macro concerns persist.

However, the long-term impact will depend on how trade and geopolitical negotiations evolve in the future.

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