President Trump Rolls Back Tariff Threat on European Nations: On Jan. 17, President Donald Trump issued a social media statement announcing the imposition of a 10% tariff on goods imported from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland beginning on Feb. 1. The statement indicated that the tariff would increase to 25% on June 1, with the new tariffs remaining in effect “until such time as a Deal is reached for the Complete and Total purchase of Greenland.” The listed nations are all members of the North Atlantic Treaty Organization (NATO), and six of the eight nations are members of the European Union (EU). The tariff threat shook markets and created uncertainty about the implementation of the U.S.-EU trade deal reached in July 2025. In response, the European Parliament delayed a vote to ratify the agreement and considered additional retaliatory measures.
 
President Trump later rolled back his threat following a “productive meeting” with NATO Secretary General Matt Rutte on Jan. 21. He announced via social media that the threatened tariffs would not go into effect due to the formation of a “framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region.” The terms of the future agreement remain unclear, but the president indicated “discussions are being held concerning The Golden Dome as it pertains to Greenland.”
 
Trump Administration Signals Positive Momentum in U.S.-China Relationship: On the sidelines of the World Economic Forum in Davos, Switzerland, this week, several U.S. officials expressed optimism regarding the U.S.-China trade relationship moving into 2026. Both Treasury Secretary Scott Bessent and U.S. Trade Representative (USTR) Jamieson Greer suggested President Trump and Chinese President Xi Jinping could meet several times this year, possibly before the scheduled trip to Beijing in April. USTR Greer said the pre-Beijing meeting, if it occurs, may center on reaching “some kind of further agreement on things we can trade between us that are non-sensitive,” while Secretary Bessent said the president has “expressed an interest” in going to the Asia-Pacific Economic Cooperation (APEC) meeting in China in late November. Secretary Bessent also pointed to a possible summer trip by President Xi to Mar-a-Lago or Washington, D.C., or a meeting on the sidelines of the G20 Summit in Miami, Florida.
 
Both administration officials highlighted that Beijing fulfilled its soybean purchase obligations, totaling around 12 million metric tons. Secretary Bessent met with Vice Premier He Lifeng on the sidelines of Davos, where he received assurances that China remains committed to its obligations. He noted that rare earth magnets have been “flowing as expected” out of Beijing with a fulfillment rate “in the 90s.” USTR Greer reiterated a desire to maintain momentum on “normal trade … and non-sensitive goods” rather than pursuing a “comprehensive trade deal.” Both officials noted that neither side “wants to upset anything,” given the current stable status of relations and slate of possible upcoming meetings.
 
HFAC Advances Bill to Implement a Stricter Export Process for Advanced Chips: On Jan. 21, the House Foreign Affairs Committee (HFAC) held a markup of various bills, including the AI Overwatch Act (H.R.6875), sponsored by Committee Chairman Brian Mast (R-FL). The bill, which would empower Congress to review and reject the export of advanced chips used to power artificial intelligence (AI) systems to countries of concern, was favorably reported by a vote of 42-2. Export licenses for such chips, granted by the Bureau of Industry and Security (BIS), would be subject to congressional notification and a 30- to 60-day review period. The measure would cover export licenses for China, Cuba, Iran, North Korea and Russia, while allowing the administration to add more countries at its discretion. During the markup, the committee approved an amendment to the bill to add a blanket ban on the export of Nvidia Blackwell chips to covered countries, following the administration’s decision to approve the sale of Nvidia H200 chips to China.
 
Both parties expressed concern that the sale of American AI chips to China endangers U.S. national security goals and technology dominance. The bill had several key members as cosponsors, including Ranking Member Gregory Meeks (D-NY), House China Select Committee Chairman John Moolenaar (R-MI) and Select Intelligence Committee Chairman Rick Crawford (R-AR).
 
President Trump Threatens to Impose Tariffs on French Wine: On Jan. 20, President Trump threatened to impose a 200% tariff on French wine, including Champagne, after President Emmanuel Macron declined to join the U.S.-led “Board of Peace” aimed at securing stability in Gaza. Wine and spirits are currently subject to a 15% tariff under the U.S.-EU trade framework, despite the European Commission’s efforts to gain an exemption for such products. Among European Union (EU) member states, France has been outspokenly critical of the trade framework. Notably, President Macron has repeatedly encouraged the EU to invoke its Anti-Coercion Instrument, which allows the bloc to respond to economic coercion by third countries, following U.S. tariff threats. Most recently, he suggested the EU should use the tool after President Trump threatened to impose a 10% tariff on select European countries that expressed opposition to the U.S. purchase of Greenland. The president did not provide a timeline for the imposition of tariffs on French wine, and official action has yet to be taken.
 
White House Remains Confident in Trade Agenda Regardless of SCOTUS IEEPA Case: On Jan. 16, White House National Economic Council Director Kevin Hassett expressed confidence in the administration’s ability to utilize alternate authorities to maintain its tariff regime should the Supreme Court (SCOTUS) rule against the use of International Emergency Economic Powers Act (IEEPA) tariffs. He suggested the administration could levy a “10% tariff … right away” should SCOTUS rule against the White House, referencing “a special authority … which would give you time to sort of iron things out.” This is likely in reference to Section 122 of the 1974 Trade Act, which empowers the president to impose up to a 15% tariff on countries for 150 days to address “large and serious” balance of payments deficits. After 150 days, the administration would need congressional approval to extend any Section 122 tariff. The Trump administration has also pointed to Section 338 of the Tariff Act of 1930, which empowers the president to levy up to a 50% duty on countries that discriminate against U.S. commerce, as an alternative authority.
 
Hasset expects that the White House will likely rely on established tariff authorities such as Section 301 and 232 tariffs to “backfill the things we’ve already achieved” in trade negotiations with countries. President Trump suggested the administration would “take a look at the word license” and other alternative authorities should SCOTUS strike down the use of IEEPA tariffs. The Supreme Court declined to rule on Trump v. V.O.S. Selections, Inc., or Learning Resources v. Trump throughout January, with Feb. 20 as the next opportunity following a month-long recess.