1108 ET - Trump's tariff threat increases pressure in Europe to raise defense spending, posing risks to trade and growth, Fitch Ratings says in a report. The agency estimates the 10% tariff could reduce European GDP by about 0.5% by end-2027, with Germany being the hardest hit, and notes the implementation remains uncertain. "The EU's official response suggested that European leaders are anxious to avoid an escalatory spiral...although some indicated that a line had been crossed by the Trump administration," Fitch says. Fitch points to potential tail-risk scenarios for Baltic states, though Denmark's AAA/Stable rating "should be robust to any territorial loss of Greenland." (paulo.trevisani@wsj.com; @ptrevisani)
(END) Dow Jones Newswires
January 20, 2026 11:09 ET (16:09 GMT)
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