"Global Growth Could Fall to 2.6% in Greenland-Initiated Trade War... Lowest Since Financial Crisis"

Oxford Economics, a UK Think Tank, Issues Forecast

There has been a warning that if the "Transatlantic Trade War" between the United States and Europe becomes a reality due to U.S. President Donald Trump's plan to annex Greenland, the global economy could plunge into its worst recession since the global financial crisis.

Reuters Yonhap News

According to Oxford Economics, a UK-based think tank, on January 19 (local time), if the United States imposes a "Greenland tariff" on European countries and Europe retaliates with measures of equal magnitude, the U.S. gross domestic product (GDP) is expected to decline by about 1%. The eurozone is also projected to suffer a similar level of damage, but the impact is anticipated to last longer than in the United States.

If the repercussions extend to other countries, overall global economic growth is also expected to slow significantly. Oxford Economics forecasts that global GDP growth could slow to 2.6% in both 2026 and 2027. Excluding the COVID-19 pandemic period, this would be the lowest annual growth rate since 2009.

This shows a clear gap from the existing growth forecasts of major international organizations. The International Monetary Fund (IMF) predicts that the global economic growth rate will reach 3.3% this year, which is a 0.2 percentage point increase from its forecast in October last year. The 2027 global growth forecast is also around 3.2%.

This warning comes amid rapidly escalating tensions between the United States and Europe over Greenland. Previously, President Trump announced plans to impose tariffs on imports from eight European countries until a "complete and comprehensive" agreement to purchase Greenland is reached. Accordingly, he stated that Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland would face a 10% tariff starting from the 1st of next month, and a 25% tariff from June 1.

Europe is also considering countermeasures. The European Union (EU) is reviewing the invocation of the so-called "trade bazooka," officially known as the Anti-Coercion Instrument (ACI), to respond to third countries that pose an economic threat to its member states. There are concerns that if the conflict between the United States and the EU escalates into an actual trade war, the spread of protectionism and rising geopolitical uncertainty could increase downward pressure on the global economy.