“This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland.”
European leaders are reportedly preparing a retaliatory response to Trump’s tariffs. The Kobeissi Letter stated:
“The next 48 hours are critical: With the EU’s emergency meeting scheduled for tomorrow we are no on step #4 of our tariff playbook. We expect the EU to take an aggressive, but open approach. They will threaten to cancel the EU-US trade deal, while encouraging President Trump to negotiate. This is exactly the position President Trump aims to achieve.”
The Kobeissi Letter elaborated on the road ahead, adding:
“Ultimately, the road to a trade deal on the Greenland situation will be longer than the recent US-China bout. Why? Because an acquisition of Greenland can’t happen overnight and the EU remains highly opposed to even the idea of such a transaction.”
Crucially, tariff developments will be key for the cautiously bullish short-term and positive medium-term outlook for US stock futures.
Chinese Economic Data Send Mixed Signals
While risk assets faced a tariff shock, Chinese economic indicators also weighed on sentiment. A sharper fall in house prices, waning retail sales, and a marked drop in fixed asset investments suggested a loss of economic momentum going into 2026. Crucially, the housing market crisis and waning private consumption could derail Beijing’s push to boost domestic demand.
Meanwhile, industrial production rose amid growing external demand, countering weaker domestic consumption. China’s economy expanded 1.2% quarter-on-quarter in Q4, up from 1.1% in the previous quarter. Despite the quarterly uptick, the economy grew 4.5% year-on-year in Q4, down from 4.8% in the third quarter. The mixed numbers left US equity futures under pressure in morning trading.
Alicia Garcia Herrero, Natixis Asia Chief Economist, recently commented on China’s domestic woes amid weakening credit demand, stating:
“China’s dual economy continues: December export data shows that China will continue to grow out of external demand, as much or even more than in 2025. Today’s loan data is the worst on record. The Chinese economy has no demand for credit (this is even worse if you focus on private credit). Imagine how weak domestic demand must be. I just returned from Shanghai, and this lack of demand is apparent everywhere.”