Follow up to the Greenland tariff war: Trump launched an additional tariff war against the EU last night, which can be called the Greenland tariff war. The problem is that the EU member states have a unified trade policy, and it is difficult to say that only eight of them will be subject to additional tariffs without affecting other EU member states. 1. Next, it depends on how the EU responds? The EU will convene an emergency meeting of member state ambassadors in Brussels today to discuss the Greenland issue and the new tariff threat from US President Trump. Makron said that Trump's tariff threat on Greenland was unacceptable. Some lawmakers are already preparing to block the trade agreement previously reached between the EU and the United States. Counterattack is inevitable 2. How do we go next? The biggest difference between the Greenland tariff war and previous tariff issues is that the core issue is territorial sovereignty rather than trade. Trade issues can be easily compromised, but territorial sovereignty issues are too weak to be easily compromised. EU leaders may not make concessions so quickly, they will play back and forth repeatedly. 3. What is Trump's ultimate appeal? In fact, from a personal point of view, Trump has never really wanted to fully incorporate Greenland into the territory of the United States, but let the United States fully control Greenland's defense and mineral resources through long-term agreements. To be honest, as long as the United States can fully control Greenland's defense and mineral resources, it doesn't make much difference whether it is included in the US territory or not. Do you remember the unequal treaties signed in the late Qing Dynasty. The use of tariffs to pressure Denmark and the EU is to make the greatest and most extreme compromise on the agreement. 4. What is the impact on the market? The Greenland tariff war should still have an impact on the market, and this timing is also unfriendly to the market: 1) Trump's administrative order restricting the upper limit of credit card interest rate will soon be implemented (affecting bank performance), and large technology companies will bear the cost of new power plants in advance; 2) Although the CPI data for December this Tuesday was decent (core CPI was lower than expected), the PPI on Wednesday was higher than expected (both PPI and core PPI were higher than expected year-on-year), and the retail monthly rate was also good; On Thursday, the New York Fed's manufacturing index was higher than expected, and the number of initial jobless claims for the week was lower than expected. This all indicates that the economy is okay and not that bad. The urgency of interest rate cuts has decreased. Then Trump said on Friday that he would let Hassett remain in the White House. Hassett is the candidate for the chairman of the Federal Reserve who advocates the largest interest rate cut. His intention to remain in office means that the market's expectation of interest rate cut is further reduced. US10Y has rebounded to 4.22%, and attention should be paid to the suppression of the market by the rise in long-term bond yields; 3) The Iran issue has not been solved, and now is just a quiet period before the aircraft carrier is deployed. We are not sure whether Trump is really ready to stop or slow down. The Greenland tariffs have increased uncertainty, and the market dislikes uncertainty the most.