The impact of tariff adjustments made by Greenland on US inflation! If Trump's set of "comprehensive tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland" is really implemented, it will push up inflation in the short term. Originally, tariffs were not a punishment to the outside world, but a cost increase tax on the US import side. Ultimately, it was the US domestic enterprises, channels, and consumers who would pay the bill, but the transmission speed and sharing ratio were different. At the 10% level, companies still have room for competition and can absorb some of it by suppressing profits, delaying price increases, adjusting supply chains, and changing production areas. Therefore, in terms of data, it may appear as a mild increase in core commodity inflation, but 25% is not an adjustment. Instead, many industries directly enter the range where price increases are inevitable, especially for categories that are difficult to replace, have weak bargaining, and have rigid demand. Price transmission will be more direct and more likely to trigger secondary inflation, which is also the biggest concern of the Federal Reserve. Tariffs will first push up import prices and PPI, then be transmitted to core commodity CPI and PCE through channel inventory and pricing, and finally to service items such as maintenance, insurance, and healthcare. The structure of Europe's exports to the United States is mainly high value-added manufacturing and key intermediate goods, so the most sensitive lines are clear: The first is automobiles and parts (Germany, UK, France, Sweden, etc.). The price increase of whole vehicles is only superficial, and the deeper issue is that the rising cost of parts will push up domestic assembly, maintenance, insurance, and used cars in the United States, ultimately turning the impact of goods into service inflation. The second is related to medicine and healthcare (Denmark, Germany, France, Netherlands, etc.), with strong demand rigidity and slow substitution, making it easier for costs to penetrate into medical insurance, commercial insurance, and terminal payments. Inflation in medical services will passively rise. The third is industrial equipment, machinery, and precision instruments (Germany, the Netherlands, Sweden, Finland, etc.), which are first reflected in PPI and capital expenditure costs, transmitted to the enterprise end and then to the terminal price, and are a typical broad-spectrum cost shift. The fourth is chemical materials and special intermediate goods (Germany, the Netherlands, Northern Europe), which may not immediately appear at the top of the CPI, but will continue to raise intermediate prices. In addition, there are consumer upgrade products and luxury goods in France, which may not have the highest weight on the total CPI, but have a strong impact on perceived inflation. Will tariffs actually suppress inflation? There is only one scenario where tariffs directly make it difficult for the Federal Reserve to cut interest rates, and maintain high interest rates for a longer period of time, and even cannot deny the possibility of interest rate hikes, further leading to economic recession or a significant decrease in investor risk appetite. It's not over here! After the tariff announcement was made, the EU's response was no longer a verbal protest, but a state of institutional stress. The European Parliament and major political groups have begun to signal the suspension and freezing of the progress of the EU US trade agreement. The EPP has suspended the relevant approval process, and EU ambassadors have held emergency meetings to discuss unprecedented countermeasures, including even tougher tool options. This indicates that the EU's judgment is not that this is an ordinary trade friction, but rather an escalation of tariffs as a geopolitical lever to exert pressure, and must use equal or even asymmetric means to push back costs. The United States will impose comprehensive taxes on Europe, and the first round of impact will definitely fall on the import costs of the United States itself. The core commodity end will rise first, and categories such as automobiles and parts, pharmaceuticals and medical chains, industrial equipment and precision instruments, and intermediate chemical materials will be the first to complete cost transmission. This is a direct and definite inflation input. If the EU implements equivalent tariffs, it will hit the US export side (agriculture, aircraft, energy, some high-end manufacturing, etc.), which may not directly push up the US CPI, but rather compress exports, profits, and employment, thereby dragging down growth and tightening corporate cash flow. The stagflation stage that truly amplifies and becomes sticky inflation is a countermeasure that further upgrades to the supply chain level, leading to a contraction in the supply of key intermediate goods and components, slower substitution, and increased transportation and compliance costs, thereby turning a one-time price shock into a longer cycle of cost escalation. Therefore, this is more like a two-way trade war, where costs will not only stay at the US import end, but will spread to the export and industrial chain ends, creating stronger stagflation pressure. The inflation side is more sticky, and the growth side is weaker. For the Federal Reserve, this will narrow down policy space, with cost based inflation and expectation management pressures brought about by tariffs on one hand, and growth pressures brought about by export damage and weak employment on the other. Ultimately, the policy path will rely more on data and be more likely to manifest as increased volatility and decreased risk appetite at the market level. To put it simply, not only will inflation in the United States rise, but there may also be risks of a downturn in the domestic economy and employment. Faced with this situation, the Federal Reserve is likely to have two major shocks. The danger of such shocks lies in the synchronous occurrence of rising inflation and declining growth. Even if the Federal Reserve sees weak employment, it will be more difficult to turn around due to inflation expectations and core PCE pressure, and the market will trade higher interest rates and volatility in advance for a longer period of time. So I personally think that if Trump really wants to implement the Greenland tariff on February 1, it is likely to be expected by the market to cause inflation to rise again, which will lead the Federal Reserve to maintain high interest rates for a longer time, which may drive investors to reduce their risk appetite and may seek refuge by selling assets. @bitget VIP， Lower rates and more generous benefits