Trump’s Trade War With Europe Is Heating Up. Here Are the Stocks and Assets Investors Are Watching

January 18, 4:33 pm

The transatlantic relationship between the United States and Europe has sharply deteriorated following an unprecedented tariff escalation tied to US strategic pressure over Greenland. Global markets are digesting the ramifications as policymakers brace for retaliation and potential trade fragmentation.

U.S. President Donald Trump has announced tariffs on imports from eight European nations - Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland - beginning February 1 at 10% and rising to 25% on June 1 unless a negotiated outcome is reached over US efforts to acquire Greenland. This tariff threat comes amid heightened US claims that Greenland is essential to national security. European leaders have condemned the move, warning it could trigger a “dangerous downward spiral” in relations and disrupt established trade frameworks.

EU ambassadors are holding emergency consultations to formulate a collective response. Some members of the European Parliament have floated suspending aspects of the transatlantic trade deal if the tariff threats continue.

These are the stocks and assets investors are watching as markets begin to price in the possibility of a new trade war.

1. Strategic Minerals Become National Security Assets

Greenland is central to the dispute because it holds large deposits of rare earth elements used in defense systems, semiconductors, and EVs. The US Geological Survey classifies many of these minerals as critical to national security.

This makes rare earth supply chains a geopolitical priority.

Critical Metals Corp (CRML)

Owner of the Tanbreez rare earth project in Greenland, one of the world’s largest undeveloped rare earth deposits.

Reuters previously reported that US officials have examined strategic involvement in the company because of Greenland’s importance to Western mineral independence. CRML shares have previously reacted strongly to geopolitical developments tied to US security priorities in the Arctic.

CRML is currently trading at $17.6 per share, up 134%(!) in the last month.

MP Materials (MP)

The largest rare earth producer in the United States and operator of the Mountain Pass mine in California.

MP Materials is central to US efforts to reduce reliance on foreign rare earth supply chains, especially China. US industrial policy has consistently highlighted MP as part of domestic critical-mineral security. In a trade-fragmenting world, domestic control of rare earth production becomes structurally more valuable.

MP is currently trading at $68.9 per share, up 27.8% in the last month.

2. Defense Spending Rises When Geopolitics Deteriorates

Trade wars tied to national security rarely remain confined to tariffs. They are usually accompanied by higher defense spending, particularly when strategic regions such as the Arctic are involved. Analysts widely expect Arctic militarization and missile defense investment to accelerate as US–Europe relations deteriorate.

Lockheed Martin (LMT)

The largest US defense contractor, heavily exposed to missile defense, aerospace, and surveillance systems.

Lockheed is a prime beneficiary of rising geopolitical tension because its revenues are driven by government budgets, not consumer demand or trade flows.

LMT is currently trading at $582 per share, up 22.8% in the last month.

Northrop Grumman (NOC)

A leading supplier of missile defense systems, surveillance platforms, and strategic deterrence technology.

Northrop’s core businesses directly benefit from increased military spending during periods of geopolitical instability.

Defense stocks have historically outperformed during periods of elevated geopolitical risk because their revenues are driven by government spending rather than consumer demand and NOC is not an exception. The stock is currently trading at $666 per share, up 17.3% in the last month.

3. Domestic Energy Becomes a Safe Haven Sector

Trade wars damage global supply chains but cannot disrupt domestic electricity demand. Utilities with US-only operations remain structurally insulated.

Constellation Energy (CEG)

America’s largest nuclear power producer with entirely domestic operations.

CEG benefits from rising electricity demand driven by AI data centers and electrification trends, while remaining shielded from tariff exposure.

CEG is currently trading at $307 per share, down 13.4% in the last month.

Vistra (VST)

A major US power generator with assets concentrated inside US borders. Vistra combines defensive cash flows with structural demand growth, making it attractive when global trade becomes unstable.

VST is currently trading at $166.6 per share, up 2.3% in the last month.

4. Alternative Currencies as a Hedge

When confidence in major currencies declines, capital historically rotates toward politically neutral stores of value.

Gold

Gold has served as a hedge against geopolitical instability for centuries.

During periods of trade conflict, central banks and institutional investors often increase gold exposure because it is no government’s liability and cannot be sanctioned or devalued by policy.

Alamos Gold (AGI), a Canadian-based intermediate gold producer, is currently trading at $38.9 per share, up 1.1% in the last month. Barrick Gold (B), a mining company that produces gold and copper, is currently trading at $48.7 per share, up 8.9% in the last month.

We have maintained a buy signal on AGI for the past year, as its AI score has consistently remained above 70.

Silver

Silver combines monetary and industrial value.

In unstable macro environments, it tends to benefit both from safe-haven demand and from its role in defense, electronics, and energy infrastructure.

First Majestic Silver (AG), a company that operates four producing silver mines, is currently trading at $21.5 per share, up 28.8% in the last month.

Bitcoin (BTC)

Bitcoin is increasingly viewed as a digital alternative to gold.

As trade wars raise fears of currency manipulation and capital controls, Bitcoin attracts investors seeking an asset outside the traditional financial system.

Bitcoin is currently trading at $93k, up 5.5% in the last month.

5. Short-Term Treasuries as a Low-Risk Hedge

During periods of geopolitical stress, capital does not only rotate into stocks and alternative currencies. It also moves into US government debt, which is still treated as the world’s primary safe-haven asset.

iShares 0–3 Month Treasury Bond ETF (SGOV)

SGOV holds ultra-short-term US Treasury bills backed by the federal government, offering a highly liquid way to preserve capital and earn yield. As of early 2026, SGOV has returned roughly 4.2% over the past 12 months, while its year-to-date performance is modest but positive, reflecting its role as a cash-like asset in uncertain markets.

It is designed to track cash-like returns while preserving capital, making it a popular parking place for investors reducing equity exposure during uncertain periods.

In trade-war environments, SGOV functions as a volatility hedge, allowing investors to stay invested in markets while minimizing downside risk.

The Takeaway

Trade wars do not unfold in headlines alone. They reshape capital flows, supply chains, currencies, and investment leadership across markets. As tensions between the United States and Europe escalate, investors are being forced to adapt to a more fragmented global economy.

History shows that periods of geopolitical and trade instability reward assets tied to national security, domestic infrastructure, and monetary independence. They also increase the risk of currency volatility, including a weaker dollar over time as trade barriers distort growth and fiscal balances.

Note: As presidential decisions increasingly move markets, our members rely on Trump Stock Alerts to stay ahead.

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