In a dramatic shift following days of escalating geopolitical tension, President Donald Trump has backtracked from his threats of economic warfare and military coercion against European allies regarding the acquisition of Greenland. It came after a high-stakes meeting on Wednesday with NATO Secretary General Mark Rutte in Davos, Switzerland, resulting in a vague "framework" for Arctic security that allowed Trump to cancel imminent punitive tariffs while claiming a diplomatic victory.
The de-escalation centred on a meeting between Trump and Rutte, after which the US president announced on Truth Social that they had reached a “framework of a future deal” concerning Greenland and the broader Arctic region. Calling the potential agreement a “great one” for the US and all NATO nations, Trump used this diplomatic opening to withdraw the threat of tariffs that had rattled global markets and strained the transatlantic alliance. “We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable,” said Trump. “But I won’t do that. That’s probably the biggest statement, because people thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force. All the United States is asking for is a place called Greenland.”
While details remain sparse, interpretations of this “framework” diverge sharply between Washington and Brussels. Trump described the arrangement as a “concept of a deal” that would last “forever”. He suggested it could involve American access to Greenland’s mineral rights and the integration of the territory into the “Golden Dome” missile defence programme, a proposed $175 billion multi-layered system intended to place US weapons in space.
NATO officials offered a more limited definition, focused on “ensuring Arctic security through the collective efforts of Allies”. A spokesperson for Rutte emphasised that negotiations would proceed between Denmark, Greenland and the US, with the specific aim of preventing Russia and China from gaining an economic or military foothold in the region.
A crucial newly emerged detail regarding the negotiations suggests a potential compromise on sovereignty. While Trump has insisted on “ownership” and Danish officials have rejected selling the island, sources indicate that military officers from NATO member states discussed a model based on the UK’s presence in Cyprus.
Under such an arrangement, the US would not acquire the entire island but could be granted sovereignty over small pockets of land designated for military bases, similar to the British Sovereign Base Areas in Cyprus. This would technically satisfy Trump’s demand for “sovereignty” without requiring Denmark to cede the entire territory. However, the political viability of such a proposal remains uncertain. A spokesperson for Rutte said the secretary general “did not propose any compromise to sovereignty” during his talks with Trump.
The most immediate impact of this diplomatic move was the cancellation of economic sanctions. Trump had vowed to impose a 10 per cent tariff on imports from eight countries—Denmark, the UK, Norway, Sweden, France, Germany, the Netherlands and Finland—starting on February 1. He had further threatened to escalate these levies to 25 per cent by June if his demands for negotiations were not met. The cancellation brought immediate relief to financial markets, with US stocks recovering from a sharp plunge to hit record highs following the announcement.
Simultaneously, Trump provided the clearest indication yet that he would not pursue a military takeover of the island. This was welcomed by European leaders, including Danish Foreign Minister Lars Løkke Rasmussen, who said it was positive that Trump had ruled out taking “Greenland by force”.
Despite the de-escalation, Trump’s address in Davos revealed the depth of his resentment towards American allies. In a “winding” and “antagonistic” speech, he complained relentlessly that the US was being exploited by Europe. He mistook Greenland for “Iceland” four times during his remarks, yet insisted that the “enormous unsecured island” was effectively “part of North America” and therefore “our territory”.
Trump framed his demand for Greenland as a debt owed to the US for its role in World War II. He castigated Denmark as “ungrateful”, arguing that the US saved the country after it “fell to Germany after just six hours of fighting”, and lamented that the US had “given it back” after the war.
The speech was replete with insults directed at other leaders. Trump mocked French President Emmanuel Macron for wearing aviator sunglasses indoors because of an eye condition, asking the crowd, “What the hell happened?” He also issued an ominous warning to Canadian Prime Minister Mark Carney, saying, “Canada lives because of the US. Remember that, Mark, the next time you make your statements.”
While the immediate crisis over tariffs has been averted, the underlying tensions remain. Trump’s aggressive pursuit of the territory prompted the European Parliament to suspend the ratification of a critical trade deal with the US just hours before his reversal, signalling a stiffening of European resolve.
Moreover, the people of Greenland remain deeply sceptical. The local government went so far as to issue a handbook urging citizens to stock up on emergency supplies for five days, prompting residents in Nuuk to buy candles and food in preparation for a potential crisis. Aaja Chemnitz, a Greenlandic member of the Danish parliament, dismissed Trump’s claims of a deal as “completely absurd”, asserting that NATO has “absolutely no mandate to negotiate anything whatsoever without us in Greenland” and reiterating the principle of “nothing about us, without us”.