Trump Steps Back on Greenland and Tariffs, Leaving Europe and NATO Seeking Clarity

Donald Trump’s sudden announcement that a “framework of a future deal” on Greenland had been reached triggered relief on financial markets and a pause in looming tariff threats, but it was met with deep scepticism in Greenland itself and caution across Europe and NATO. After weeks of escalating rhetoric that had pushed transatlantic relations to the brink, the US president appeared to step back from his most confrontational stance, even as major questions about sovereignty and substance remained unanswered.

Speaking at the World Economic Forum in Davos, Trump reiterated that he wanted Greenland, explicitly referring to “right, title and ownership”, yet ruled out the use of military force. Hours later, he posted on social media that a framework agreement had been formed following talks with NATO Secretary General Mark Rutte and announced that tariffs planned against eight European countries would not go ahead. He later described the outcome more vaguely as “a concept of a deal” in comments to CNBC.

European leaders largely welcomed the de-escalation. Danish Foreign Minister Lars Løkke Rasmussen said the day had “ended better than it started” and called for calm discussions to address US security concerns in the Arctic while respecting Denmark’s red lines on sovereignty. Italy’s Prime Minister Giorgia Meloni also greeted Trump’s move positively, while NATO’s Rutte struck a more guarded tone, warning that significant work still lay ahead.

Despite the fanfare, details were scarce. Rutte said the question of whether Greenland would remain part of the Kingdom of Denmark had not been discussed, and a NATO spokesperson later stressed that no compromise on sovereignty had been proposed. Trump himself offered little clarity, apart from saying talks were continuing on a US missile defence project, dubbed the “Golden Dome”, that could partly be based in Greenland.

Reports in several international media outlets suggested that the informal framework might allow the United States to exercise sovereignty over limited areas hosting military bases, such as the Pituffik base in northern Greenland, with possible scope for additional sites in the future. Comparisons were drawn with British sovereign base areas in Cyprus. Other reports claimed the US could gain expanded rights to mine rare earth minerals and even a right of first refusal on investments in Greenland’s mineral sector, aimed at blocking Russian and Chinese involvement.

These ideas provoked strong reactions in Denmark and Greenland. Danish MP Sascha Faxe criticised the talks as little more than “two men having a conversation”, arguing that no agreement was legitimate without Greenland’s direct participation. Greenlandic MP Aaja Chemnitz Larsen said suggestions that NATO or external actors could decide on the island’s sovereignty or resources were “completely out of the question”. On the streets of Nuuk, residents interviewed by AFP expressed outright distrust, with one calling Trump’s claims a lie and another insisting that “Greenland belongs to the Greenlanders”.

China also weighed in, with its foreign ministry dismissing what it called a “so-called China threat” as groundless and accusing others of using Beijing as a pretext for their own interests. Meanwhile, Sweden’s foreign minister Maria Stenergard said allied unity had had an effect and stressed that Europe would not accept blackmail. Dutch Prime Minister Dick Schoof described Trump’s withdrawal of tariff threats as a clear sign of de-escalation.

Markets reacted swiftly. After sharp losses earlier in the week, triggered by Trump’s more aggressive comments on Greenland, US and global markets rebounded once he ruled out the use of force and lifted tariff threats. Analysts said uncertainty had been priced out, while some observers noted a familiar pattern in which Trump escalates pressure before retreating when markets turn against him.

In the background, broader geopolitical concerns were never far away. Canadian Prime Minister Mark Carney, who had delivered a pointed defence of the rules-based international order at Davos, welcomed what he described as progress toward strengthening Arctic security through NATO cooperation. NATO officials reiterated that discussions among the seven Arctic allies would focus on preventing Russia and China from gaining an economic or military foothold in Greenland.

By the end of the day, the immediate crisis had eased, but the substance of Trump’s claimed breakthrough remained opaque. Tariffs were shelved, military threats were withdrawn, and a loose framework for further talks was acknowledged. However, Denmark maintained that sovereignty was non-negotiable, Greenland rejected any deal made over its head, and NATO emphasised that no agreement compromising territorial integrity had been reached. What actually happened was not a binding deal on Greenland’s future, but a political pause: rhetoric cooled, economic pressure was lifted for now, and negotiations were deferred to quieter channels, leaving the core issues unresolved.