Global financial markets were severely affected as the current United States President Donald Trump, taking to a dramatic phase regarding Greenland, forced a large sell-off in shares and a depreciation of the dollar.

Investor trust was broken when Trump threatened major tariffs on Denmark and several other European countries if not talks started on the transfer of the island to the USA. Trump supports his claim by stating that the Arctic region is of vital importance to the US defense against the expanding Chinese and Russian influence in the area.

Greatest losses on Wall Street were seen since the last decade. The company’s base S&P 500 went down almost 2.1 percent, while about 2.4 percent of the Nasdaq Composite went down. The Dow Jones Industrial Average also finished down sharply, almost 1.8 percent lower.

At the same time USD, which is the most common currency for international trading, lost approximately 0.8 percent of its value, thus becoming less attractive to investors who adopt the safe-haven strategy in times of market instability. The opposite happened to the traditional safe assets, whose demand surged, with gold rising almost 2 percent to a historic level over $4,700 an ounce.

European bourses mirrored US ones, signalling the rising tension in the transatlantic relationship. The London FTSE 100 index, for example, closed approximately 0.7 percent lower, whereas the DAX index in Germany lost more than 1 percent. Markets in Asia continued the downtrend into Wednesday, with Japan’s Nikkei 225 and South Korea’s KOSPI initially falling over 1 percent before recovering some of the loss.

Trump’s escalating effort to control Greenland has not only put a cloud over the transatlantic trade but also caused fears about the very existence of NATO and hence the stability of the Western world. And, curiously enough, while at NATO, the US president has made it clear that the use of military force is not off the table.

Denmark has loudly and clearly dismissed all proposals for the sale of Greenland and has gone so far as to say that any act of grabbing the land would shake the very basis of the NATO alliance comprised of 32 members and treating, accordingly, the assault on one as equal to that on all.

Through this heightening of the rhetoric, the European Union is going to have an emergency meeting on Thursday where it will discuss potential actions to take. Among these could be the activation of the EU’s anti-coercion mechanism which allows the bloc to impose sweeping restrictions on US technology companies that are active in their market.

On Tuesday, during the press conference at the White House, Trump said he would not divulge the extent of his actions to acquire Greenland, he only added, “You will find out.” He then sounded positive about the eventual conclusion of the deal.

In a mirror image of the situation, at the World Economic Forum in Davos, President of the European Commission, Ursula von der Leyen, not only confirmed the EU’s readiness to work with the US on Arctic security but also made it known that the issue of national sovereignty would not enter the bargaining table.

“We will reply, as one, with a strong and proportionate response,” said von der Leyen, adding, however, that increasing tensions could only be advantageous to the competing powers that wish to exercise their influence in the Arctic.