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Confrontation over Greenland raises economic risks

Our latest analysis looks at a confrontation over Greenland and the knock-on economic risks if trade policy is used as leverage between allies.

The immediate issue is political and security-led. But the mechanism being deployed – threats of additional tariffs against a group of European countries – turns the episode into a test case for how far economic tools might be used to pursue non-trade objectives. Even if the direct trade impact is contained, the precedent matters. Once tariffs become a bargaining chip for security disputes, businesses have to plan for a wider range of “policy shocks” that can hit supply chains, pricing and market access with limited warning.

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