Story perspectives

U.S. Urges Europe to Avoid Tariff Retaliation Amid Crisis

1/20/2026

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Summary

Story summary

U.S. Treasury Secretary Scott Bessent urged European nations at Davos to refrain from retaliating against tariffs tied to Greenland crisis.
He stressed patience after last year's tariff disputes with China.
Bessent dismissed fears that Europe would dump U.S. Treasuries as a "false narrative."
International Monetary Fund Managing Director Kristalina Georgieva warned against a new trade war and urged economic stability.
Global markets fell, with declines in stocks and the dollar.

History

Historical Context

The Smoot-Hawley Tariff Act, signed by President Herbert Hoover on June 17, 1930, raised tariffs on over 20,000 imported goods, aiming to protect U.S. industries during the Great Depression. This protectionist measure led to retaliatory tariffs from countries like Canada and the UK, worsening the economic crisis and reducing global trade by about 66%, highlighting the importance of international cooperation in trade policy.

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Story summary

U.S. Treasury Secretary Scott Bessent urged European nations at Davos to refrain from retaliating against tariffs tied to Greenland crisis.
He stressed patience after last year's tariff disputes with China.
Bessent dismissed fears that Europe would dump U.S. Treasuries as a "false narrative."
International Monetary Fund Managing Director Kristalina Georgieva warned against a new trade war and urged economic stability.
Global markets fell, with declines in stocks and the dollar.

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