Global trade policy is rapidly transforming into a strategic instrument, creating a unique market environment where stable financial conditions coexist with increasingly turbulent commodity pricing. This shift is highlighted by two key developments: "The Greenland episode" and Canada's notable pivot toward China, according to analysis from Rystad Energy's Chief Economist, Claudio Galimberti.
Greenland has unexpectedly become a flashpoint of tension between the United States and Europe. Washington's escalating strategic interest in the island, driven by its military relevance, Arctic access, and reserves of critical minerals, has prompted a European response. Nations including Denmark, France, and Germany have increased their military presence through coordinated Arctic exercises. The threat of new tariffs by US President Donald Trump against Denmark and other European nations could potentially raise effective tariffs on the EU up to 30%. "Although no formal policy shift has yet been enacted, the episode has introduced new uncertainty into transatlantic trade relations," Galimberti noted.
Consequently, Canada has started to adjust its foreign trade policy, with Prime Minister Mark Carney's trip to Beijing signaling an improvement in the previously strained relationship with China. A recent trade agreement delivered a mixed outcome: a reduction in Chinese tariffs on Canadian canola products, balanced against politically sensitive concessions on tariffs for Chinese electric vehicles entering Canada. The discussions have also reactivated channels for wider collaboration, including potential energy exports, as Ottawa evaluates its reliance on the US market.
This geopolitical risk is now predominantly transmitted through commodity markets. "Oil prices have been volatile amid developments involving Iran and broader Middle East tensions, while gold and industrial metals have reached new highs as investors seek hedges against geopolitical uncertainty and supply-side risks," Galimberti said. Energy and metals markets are increasingly sensitive to strategic trade measures, sanctions, and security-driven policy decisions.
Amid these tensions, Bitcoin has dropped below the key $90,000 support level as geopolitical risks drive caution across financial markets. The macroeconomic context shows resilience, with US inflation stabilizing and consumer spending strong, but markets are beginning to react to the heightened political uncertainty. Greenland's Prime Minister Jens-Frederik Nielsen has urged calm but warned that the risk of a U.S. military conflict, while low, cannot be ruled out as the region hosts military forces from Denmark and seven other NATO countries.
