22 January 2026 – EU Trade Commissioner Maroš Šefčovič wants to finally wield a tariff hammer of his own and is now proposing to effectively dilute the World Trade Organization’s Most-Favoured-Nation (MFN) principle. Also: after tensions over Greenland have eased and the threat of new tariffs has been withdrawn, markets have calmed significantly today.
Markets Calm After Greenland Announcement
After it emerged last night on the sidelines of the World Economic Summit in Davos that a basic agreement had been reached between the United States and NATO regarding Greenland, and that the announcement of new US tariffs against several EU Member States had been withdrawn, markets calmed noticeably.
Base metal prices in Asia traded on a firmer footing today, moving either sideways or posting modest gains. LME nickel remained stable in early trading, holding above USD 18,000 per tonne.
The rise in nickel prices over recent weeks has also been clearly reflected in European stainless steel alloy surcharges. For example, the alloy surcharge for stainless steel grade 304 for February 2026 increased by more than 10% month-on-month.
MFN Tariffs: Why the EU Is Undermining Its Own Trade Tradition
In an opinion piece published in the Financial Times, EU Trade Commissioner Maroš Šefčovič proposes effectively weakening the WTO’s MFN principle. Under his proposal, low tariffs would no longer apply automatically, but would instead be tied to “fair” practices and market openness.
This may sound decisive. In reality, it represents a break with what has made Europe strong for decades – and it is striking that the EU’s Trade Commissioner now appears to favour a tariff hammer over negotiations.
The MFN Principle Is Not a Detail, but the Foundation of the Global Trading System
The MFN principle is not a technical footnote; it is the foundation of the multilateral trading system. Its core idea is simple: what is granted to one is granted to all. No political assessments, no special treatment, no power plays-aside from clearly defined exceptions such as free trade areas or customs unions. This rule has ensured predictability in global trade for decades.
The EU Benefits Massively from the WTO System
The EU benefits enormously from the World Trade Organization. A large share of its external trade is conducted on a WTO basis. European companies rely on market access not being subject to political goodwill or the activism of a lobby-driven Commission.
If Brussels now argues that equal treatment must be “earned”, it turns a legal principle into a political pressure tool.
Politicians Are Not Traders
This is not progress-it is regression. Trade is handed back to politics. This is precisely how trade functioned before the creation of the WTO: tariffs as instruments of power, access as a reward, rules shaped by the strong. It resembles classic mercantilism more than modern trade policy.
The Trade Commissioner Is Sawing Off the Branch of Europe’s Export Economy
From an EU perspective, this approach is particularly contradictory. Europe’s economic strength is built not on selective protectionism, but on open, stable, and non-discriminatory rules. Weakening the MFN principle is equivalent to sawing off the branch on which Europe’s export economy sits.
The risks are clear:
- less predictability in global trade,
- more political arbitrariness instead of clear rules,
- increased fragmentation into bilateral and regional deals,
- further weakening of the WTO.
If the EU truly wants to defend a rules-based order, it must protect its core. Automatic, unconditional non-discrimination is not a fair-weather principle – it is the last safeguard against the “rule of the strongest”.
That the European Parliament is simultaneously subjecting major trade agreements such as Mercosur to legal scrutiny shows that even within Europe, distrust is growing toward its own trade policy and the legal robustness of the Trade Commissioner’s “deals”.
Or, as Thorsten Gerber, CEO of the Gerber Group, put it today: “Just finally shut up.”
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