Europe prepares trade retaliation over Trump’s Greenland tariff threats

Good morning. Here's what happened overnight and what you need to know today.

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1.

Arctic ultimatum: Donald Trump escalated the deepest rift among NATO allies in more than 70 years, announcing a 10% tariff on goods from eight European countries that oppose his plans to takeover Greenland, rising to 25% in June unless the US is allowed to purchase the country. The tariff threat, made after those countries sent small numbers of troops to Greenland for a NATO exercise, prompted a joint statement from the targeted nations warning of a “dangerous downward spiral”. France, Germany, the UK, the Netherlands, Denmark, Norway, Sweden and Finland were named in Trump’s announcement. EU ambassadors met Sunday to discuss next steps, and the European Parliament is now expected to suspend approval of the US-EU trade deal reached last year. French President Emmanuel Macron will ask the EU to activate its anti-coercion instrument (which can restrict access to the single market for American companies) in response to the tariffs, the Élysée said. Danish officials said the NATO military exercise in Greenland was intended to strengthen Arctic security and posed no threat to anyone. Meanwhile US Treasury Secretary Scott Bessent said the US won’t back down, while Deputy Chief of Staff Stephen Miller argued Denmark had “failed” to defend Greenland. (Joint statement)(Donald Trump)(Bloomberg)(WSJ)(FT)(Reuters)

2.

Peace prize: Trump invited a group of world leaders, including Prime Minister Anthony Albanese, to join a proposed “Board of Peace” for Gaza, part of a broader postwar plan that has prompted criticism from Israel and concern among other nations. A spokesperson cited by the Australian Financial Review said that Australia welcomed Trump’s efforts towards a sustainable peace and looked forward to discussions with the US administration. According to a draft charter seen by Bloomberg, Trump would serve as inaugural chairman, control who is invited, and approve all decisions, the agenda and even the board’s seal. Countries that contribute USD1 billion within the first year would be granted permanent membership, according to the draft. Argentina, Canada, Egypt, Turkey, Saudi Arabia and several European nations have also received invitations. Canadian Prime Minister Mark Carney said he agreed in principle to joining but not to the payment. Israeli Prime Minister Benjamin Netanyahu criticised the separate Gaza Executive Board for including Turkish and Qatari officials, saying it was “not coordinated with Israel and contrary to its policy”. Bloomberg reported several countries are working to push back against the proposals, amid concerns Trump is seeking to build an alternative to the United Nations. (Bloomberg)(WSJ)

3.

One surge: New polling shows Anthony Albanese’s personal standing with voters has fallen sharply and Labor’s support has dropped to its weakest point in a year after weeks of political brawling and mixed messaging following the terror attack on a Hanukkah celebration at Bondi Beach. A Resolve Political Monitor poll for the Sydney Morning Herald found Labor’s primary vote slid 5 percentage points in a month to 30%, while a Newspoll survey for The Australian recorded a 4-point fall to 32%. Albanese’s net performance rating dropped from plus 6 to minus 22 in Resolve, while Newspoll showed his net approval at minus 11. As apparent in previous Capital Brief polling, both polls showed a surge in support for Pauline Hanson’s One Nation, reaching 18% in Resolve and 22% in Newspoll, with the latter putting the party ahead of the Coalition on primary votes for the first time. The polling results came as Albanese split his proposed gun and hate speech omnibus bill after support collapsed, and after reversing his position to establish a royal commission into antisemitism. On Sunday, the Executive Council of Australian Jewry criticised the removal of vilification offences from the hate speech laws, while the Australian Federation of Islamic Councils said it remained seriously concerned about new powers for the home affairs minister to designate hate organisations without public disclosure of evidence or avenues of appeal. (AFR)(SMH)(The Australian)

4.

Venture confident: Aware Super says regulation hasn’t held back its venture capital strategy. In comments contrasting with calls from other funds for reform, Aware Super’s head of private equity Jenny Newmarch told Capital Brief the $200 billion fund invests in venture and secondaries, with venture accounting for about 10% of its portfolio and 15-20% of members’ portfolios due to longer hold periods and expected performance. She said the performance test “hasn’t been a barrier”, and that co-investment helps manage fees and enhance net returns. Newmarch said small cheque sizes are not a barrier if the team can scale over multiple rounds and said the fund invests in venture secondaries but flagged liquidity and alignment with general partners as possible challenges. By contrast, HESTA boss Debby Blakey told Capital Brief the $100 billion fund supports changes to the performance test, arguing it constrains investment teams, drives benchmark herding and limits innovation. Blakey also suggested there is a need for regulatory change to enable greater use of secondaries. It comes as SecondQuarter Ventures has been urging super funds to help close a $12 billion liquidity gap in venture. (Capital Brief)

5.

Musk battle: Elon Musk is seeking up to USD134 billion ($200 billion) from OpenAI and Microsoft, claiming in a court filing cited by Reuters that they received “wrongful gains” from his early involvement in co-founding OpenAI. Filed ahead of a trial expected to start in April, the complaint reportedly says OpenAI gained between USD65.5 billion and USD109.4 billion, and Microsoft between USD13.3 billion and USD25.1 billion, due to Musk’s support. The filing states Musk contributed about USD38 million, or 60% of OpenAI’s early seed funding, helped recruit staff, made introductions and lent credibility to the project. His lawyer Steven Molo said in a statement to Reuters that Musk provided “the bulk of the seed funding, lent his reputation, and taught them all he knows about scaling a business”. The financial estimates were prepared by Musk’s expert witness, economist C Paul Wazzan. Musk may also seek punitive damages and other penalties, including a possible injunction. OpenAI called the claim an “unserious demand” and part of a “harassment campaign”. A Microsoft lawyer said there was no evidence the company “aided and abetted” OpenAI. Both companies disputed the damages figures and asked the judge to limit what Wazzan can present, calling his analysis “made up”, “unverifiable”, “unprecedented” and “implausible”. (Reuters)

6.

Fed stakes: The Trump administration’s criminal investigation into Jerome Powell has injected turmoil into Donald Trump’s search for a new Fed chair, as the president weighs four finalists ahead of Powell’s term ending on 15 May. Bloomberg reported that Rick Rieder, BlackRock’s chief investment officer of global fixed income, has gained late momentum, with some seeing him as more likely to win Senate confirmation. The other candidates are National Economic Council director Kevin Hassett, Fed governor Christopher Waller and former governor Kevin Warsh. Treasury Secretary Scott Bessent, who is leading the process and has ruled himself out, told NBC the Senate would be “quite happy” with any of them. Trump has indicated he may want to keep Hassett in his current role. Meanwhile, former Treasury secretary Janet Yellen told Bloomberg the probe on Powell had backfired and was “very dangerous.” Trump denies knowing about the DOJ investigation. Meanwhile, on Saturday, Trump threatened to sue JPMorgan Chase over what he claimed was the bank debanking him after the 6 January 2021 Capitol riot. (Bloomberg)(The Guardian)

7.

Mayne moves: Mayne Pharma is considering spinning off its US operations as part of a broader strategic review aimed at delivering value to shareholders, after Treasurer Jim Chalmers blocked a proposed takeover by Cosette Pharmaceuticals worth more than USD600 million. The December decision, based on foreign investment concerns, followed warnings from Cosette to the Foreign Investment Review Board that it could close Mayne’s Salisbury facility if the deal went ahead. In the wake of the blocked acquisition, Mayne consulted shareholders on next steps, prompting a board restructure that has already seen three directors, including chair Frank Condella, depart. The company is now valued at about $230 million, with its share price falling from around $7.20 following Cosette’s February 2025 offer to below $2.90, its lowest point since mid-2023. Significant investor Rubric Capital Management holds USD29.6 million ($44.2 million) in convertible notes redeemable above $5.356. An anonymous analyst told Capital Brief Mayne’s US operations, which generate more than USD300 million annually, lack strategic alignment with its Australian manufacturing arm. A shareholder said a split could ease a future foreign sale. Past interest in the Salisbury site from Pyridam Farma and IDT Australia may also return to focus. Mayne sold its US-based Metrics business for USD475 million in 2022. (Capital Brief)

8.

Syrian ceasefire: Syria’s government and the US-backed Syrian Democratic Forces (SDF) reached an immediate ceasefire after a rapid military offensive by pro-government forces led to the capture of key areas in northeast Syria. Under the agreement, SDF fighters will retreat east of the Euphrates River, while the government takes full military and administrative control of the provinces of Raqqa, Deir al-Zor and Hasakah, as well as all border crossings, oil and gas fields. Syrian forces seized the Omar oil field, the Conoco gas field, the Rusafa and Safyan oil fields, and the Euphrates hydroelectric dam, which has a power generation capacity of 880 megawatts, according to media reports. SDF fighters are expected to be integrated into the defence and interior ministries after security vetting. The group also committed to removing all non-Syrian members of the Kurdistan Workers’ Party (PKK) from Syria, Reuters reported citing a document published by the Syrian presidency. The agreement was signed by President Ahmed al-Sharaa and SDF commander Mazloum Abdi. US ambassador Tom Barrack welcomed the ceasefire and praised both parties for their “constructive efforts”. Sharaa, who ousted Bashar al-Assad in December 2024, said “all lingering files with the SDF will be resolved,” according to state media. (WSJ)(Bloomberg)(Reuters)