French President Emmanuel Macron has fired a direct shot at Donald Trump’s aggressive trade strategy, condemning what he calls an attempt to “weaken and subordinate” Europe through escalating tariffs and economic coercion.
Speaking at the World Economic Forum in Davos on Tuesday, Macron didn’t hold back. His remarks came just hours after Trump threatened 200 per cent tariffs on French wines and champagnes over France’s refusal to join his proposed “Board of Peace” initiative.
The French leader, sporting aviator sunglasses to protect a burst blood vessel in his eye, delivered one of the forum’s most anticipated addresses. Without naming Trump directly, Macron made his target unmistakable.
“We Prefer Respect to Bullies”
Macron’s speech painted a stark picture of deteriorating international relations. He described Trump’s tariff strategy as an “endless accumulation of new tariffs that are fundamentally unacceptable, even more so when they are used as leverage against territorial sovereignty.”
The rebuke comes amid Trump’s extraordinary push to acquire Greenland from Denmark, backed by threats of escalating tariffs on eight European nations starting 1 February 2026.
Key targets include:
- Denmark, Norway, Sweden and Finland
- France, Germany and the Netherlands
- United Kingdom
Trump announced tariffs would begin at 10 per cent before rising to 25 per cent by June if his Greenland acquisition demands aren’t met.
“We do prefer respect to bullies,” Macron declared. “And we do prefer rule of law to brutality.”
French President Emmanuel Macron at Davos as tensions with the US escalated. [World Economic Forum]
Markets Crumble Under Trade War Fears
Global market reaction has been swift and severe. European markets tumbled for a second consecutive session, with the Stoxx Europe 600 Index dropping 1.2 per cent as investors scrambled to assess the economic fallout.
Germany’s automotive giants bore the brunt of Tuesday’s selloff:
- Volkswagen fell 2.82 per cent
- BMW dropped 3.74 per cent
- Mercedes-Benz shed 2.5 per cent
French luxury powerhouse LVMH experienced its steepest single-day decline since April, plunging 4.69 per cent as fears mounted over potential US tariffs on high-end European goods.
Wall Street followed suit. The S&P 500 tumbled 2.1 per cent, wiping out A$1.8 trillion in market value. The tech-heavy Nasdaq crashed 2.4 per cent, whilst the Dow Jones Industrial Average shed 870 points.
According to CNBC, gold prices surged to fresh highs as investors fled to safe-haven assets, with spot gold climbing 1.69 per cent to US$4,672.66 per ounce.
EU Prepares “Trade Bazooka” Response
Europe isn’t backing down. Macron has called for the deployment of the EU’s Anti-Coercion Instrument (ACI) – colloquially known as the “trade bazooka” – which could inflict billions in costs on US companies.
The ACI would allow Brussels to:
- Restrict US market access across the 27-nation bloc
- Bar American firms from public tenders
- Limit foreign direct investment
- Impose export and import restrictions on goods and services
French Finance Minister Roland Lescure confirmed Monday that the EU “must be prepared” to activate this nuclear option if Trump follows through on his threats.
EU leaders have scheduled an emergency summit in Brussels on Thursday to finalise their response strategy. Germany’s finance chief called Trump’s Greenland demands a “red line,” though Chancellor Friedrich Merz struck a more cautious tone.
The bloc has also indicated it could snap back €93 billion (A$165 billion) in tariffs on US goods – measures that were shelved after last summer’s trade deal.
Economic Fallout Could Span Years
Economists warn the Trump policy effect could shave 0.25 percentage points off European GDP this year alone.
Carsten Brzeski, global head of macro at ING, told clients, “For businesses, the developments over the weekend mean another period of uncertainty around investments in and exports to the US.”
The stakes are enormous. EU-US trade in goods and services totalled €1.7 trillion (A$3 trillion) in 2024, according to Eurostat – roughly €4.6 billion (A$8.2 billion) daily.
Trump’s Greenland tariffs threaten sectors across the board:
- Automotive manufacturing
- Luxury goods and fashion
- Wine and spirits
- Technology and electronics
- Aerospace and defence
Political Theatre Turns Personal
The diplomatic spat has taken an unusually personal turn. Late Monday, Trump published screenshots of private text messages between himself and Macron on Truth Social.
Donald J. Trump Truth Social Post 12:47 AM EST 01.20.26
President Trump posts a screenshot text from President Macron of France, inviting him to dinner to discuss a variety of things such as Iran and Greenland.
“Note from President Emmanuel Macron, of France:” pic.twitter.com/nipUKDYnWX
— Commentary Donald J. Trump Posts From Truth Social (@TrumpDailyPosts) January 20, 2026
In the leaked exchange, Macron expressed confusion over Trump’s Greenland push and offered to host a G7 meeting in Paris, including Ukrainian, Danish, Syrian and Russian representatives.
Trump’s response was characteristically blunt: he’d impose 200 per cent tariffs on French wines if Paris didn’t join his Board of Peace initiative.
The Wine & Spirits Wholesalers of America condemned what it called “punitive trade threats,” warning that “even the prospect of a 200 per cent tax on imported goods sends shockwaves through supply chains.”
Also Read: Trump at Davos 2026: Markets Reverse Course After President Rules Out Military Force for Greenland
What Comes Next
Wednesday’s Davos address by Trump looms as the week’s critical inflection point. Markets will scrutinise every word for signals of whether he’ll escalate or de-escalate tensions.
Meanwhile, trade war uncertainty continues to hammer business confidence globally. The CBOE Volatility Index – Wall Street’s “fear gauge” – spiked to its highest level since mid-November.
“Uncertainty is the enemy of growth,” warned Steven Durlauf, professor at the University of Chicago’s Harris School of Public Policy. “These actions really do represent an end of the credibility of American commitments.“
As Europe braces for Thursday’s emergency summit and markets digest Tuesday’s brutal selloff, one thing appears certain: the transatlantic alliance faces its most serious economic and diplomatic test in decades.
