DAVOS/NUUK: U.S. President Donald Trump has backed off aggressive threats over Greenland, ruling out force and tariff retaliation, triggering widespread relief across Europe and a rebound in markets.
The shift followed weeks of escalating rhetoric that strained NATO ties and risked a transatlantic trade war.
U-Turn After Davos Talks
On January 21, 2026, at the World Economic Forum in Davos, Trump met NATO Secretary General Mark Rutte and declared no use of force to acquire the Danish autonomous territory. He posted on Truth Social that a “framework of a future deal” had been formed regarding Greenland and the broader Arctic, leading him to cancel planned tariffs on eight European nations set for February 1.
Trump emphasized U.S. and NATO security needs, including missile defense and blocking Russia-China influence, without discussing mineral exploitation.
European and Greenlandic Reactions
Danish Prime Minister Mette Frederiksen welcomed the de-escalation but stressed no NATO talks had touched Greenland’s sovereignty. Negotiations on security would continue bilaterally among the U.S., Denmark, and Greenland.
In Nuuk, resident Ivi Luna Olsen expressed relief at the climbdown but urged caution, recalling Trump’s earlier forceful language. German Chancellor Friedrich Merz called for preserving the transatlantic partnership despite recent strains.
Market and Alliance Impact
The reversal calmed fears of alliance rupture, boosting European stocks. However, diplomats noted lasting damage to trust, with one EU source saying Trump had “crossed the Rubicon” and predictability was gone.
Business groups highlighted risks from policy volatility.