Donald Trump remarks invite global rebuttals, move share prices

US President-elect Donald Trump refused on Tuesday to rule out using military or economic action to pursue acquisition of the Panama Canal and Greenland, part of a broader expansionist agenda he has promoted since winning the Nov. 5 election.

Trump, who takes office on Jan. 20, also floated the idea of turning Canada into a US state, said he would demand far higher defense spending from NATO allies and promised to change the name of the Gulf of Mexico to the Gulf of America.

Canada's minister of foreign affairs, Melanie Joly, said on X, "President-elect Trump's comments show a complete lack of understanding of what makes Canada a strong country. Our economy is strong. Our people are strong. We will never back down in the face of threats."


Asked if he could assure the world he would not use military or economic coercion as he tries to gain control of the Panama Canal and Greenland, Trump said, "No, I can't assure you on either of those two. But I can say this, we need them for economic security." He suggested he would impose tariffs on Denmark if it resists his offer to purchase Greenland. Denmark has said Greenland, a self-governing part of its kingdom, is not for sale.

The EU will not let other nations attack its sovereign borders, France's foreign minister said on Wednesday, responding to Trump. "There is obviously no question that the European Union would let other nations of the world attack its sovereign borders, whoever they are," he told France Inter radio.

Trump also said NATO members should spend 5% of their GDP on defense, a significant increase from the current 2% target. NATO estimated that 23 of its 32 members would meet its goal of spending 2% of GDP in 2024.

"At this stage, his statements raise questions and create uncertainty about the trade and foreign policy he intends to implement the day after his inauguration on Jan. 20," a team led by CIC Market Solutions economist Adrien Regnier-Laurent noted.

Impact on markets
Shares in firms exposed to wind energy including Orsted, Siemens Energy and Vestas Wind Systems all fell more than 4% on Wednesday after Trump said he would have no wind farms constructed during his second term.

Makers of weapons got a boost after Trump called on NATO members to spend the equivalent of 5% of their economic output on defense, more than double the current target. Shares in Norwegian missile maker Kongsberg Gruppen gained as much as 4.1%, while Sweden's Saab was up 5% and Germany's Rheinmetall rose 5.3%.

Such moves are an early taste of the volatility investors can expect from Trump's term in office. His comments have sparked moves in stocks as far away as Australia, with small-cap miner Energy Transition Minerals, which has a rare earths project in Greenland, surging 52% after Trump reiterated his interest in acquiring the island.