Donald Trump has walked back threats to impose US tariffs on eight European countries, claiming he has agreed a “future agreement framework” on Greenland.
Four days after vowing to introduce steep import duties on a string of US allies, the president backtracked on their support for Greenland as an autonomous Danish territory.
The US will not hit Denmark, Norway, Sweden, France, Germany, Germany, the UK, the Netherlands and Finland with rates of 10 percent, Trump wrote on his truth social platform. Over the weekend, he also threatened to raise tariffs by 25% from June 1.
This threat caused widespread concern. Criticism from senior European politicians, who declared that they “will not allow themselves to be blackmailed”. And warnings from economists.
EU leaders had threatened to deploy the bloc’s so-called anti-screen instrument (ACI), otherwise known as a “trade bazooka”, which could have retaliated in defense of the EU’s coercive measures through extraordinary trade sanctions.
On Wednesday, after what he called a “very productive” meeting with NATO Secretary General Mark Rutte, Trump claimed he had created a “framework” for a deal over Greenland without providing more information.
“Based on this understanding, I will not be implementing the rates that were in effect on February 1,” the president said.
Trump did not provide further details about the deal, but said discussions were ongoing about a US missile defense shield that would be based in Greenland.
He claimed at the Davos Economic Forum in Switzerland that the deal would be “forever”. “We have a concept of a deal. I think it’s going to be a very good deal for America for them as well,” Trump told financial news network CNBC. “It’s a little complicated, but we’ll explain it down the line.”
Alison Hart, a NATO spokeswoman, said: “The framework that the president has discussed among NATO Allies will focus on ensuring Arctic security through the collective efforts of Allies, particularly the seven Arctic Allies.
He added: “Negotiations between Denmark, Greenland, and the United States will continue with the goal of ensuring that Russia and China never gain a foothold in Greenland – economically or militarily.”
Denmark’s foreign minister said Trump had sent positive signals by saying he would not use military force to seize Greenland.
“Trump said he would stop a trade war. He says: ‘I’m not going to attack Greenland.’ These are positive messages.
Trump “also had a good conversation with the Secretary General of NATO,” he said, without giving details.
At a NATO meeting on Wednesday, military officers from member states of the transatlantic alliance discussed a compromise that would give the United States sovereignty over small pockets of Greenland, the New York Times reported, citing three unnamed senior officials. It said two officials compared the proposal to Britain’s military bases in Cyprus, which are considered British territory.
Hours before mounting tariffs during a contentious speech in Davos, Trump said the U.S. would not use force to seize Greenland, but stressed he still intended to use his nation’s economic and diplomatic power to get it — and accepted the benefits of U.S. tariffs.
“You are a party to them – in some cases, a victim of them,” he told delegates gathered from around the world. “But in the end, it’s a fair thing, and most of you realize that.”
Yet the U.S. president has repeatedly taken his extreme risks on rates — most notably last spring, when he hailed the start of a new era for the U.S. economy, only to unleash a sweeping wave of tariffs.
The concern over Trump’s aggressive trade strategy is not just international, but domestic. Its rates have repeatedly sparked fears about the US economy. Wall Street suffered its worst day since October on Tuesday, the first day it traded after Trump’s threat to attack NATO allies over Greenland raised rates.
The US president pays close attention to stock market movements, and mentioned them several times in his speech on Wednesday. He took credit for the fact that he has hit a series of record highs since returning to his post, but admitted that he dipped this week “because of Iceland”, apparently referring to the pursuit of Greenland.
After posting on Wednesday, global markets recovered. The benchmark S&P 500 closed up 1.2 percent in New York, as the Dow Jones industrial average — closed at 50,000 for the first time — climbed 1.2 percent to end at 49,077.23.
Trump’s recent obsession with Greenland, which comes after the United States toppled the government of Nicolás Maduro in Venezuela, has rattled world officials in recent weeks. Trump claims that Denmark owes Greenland to the United States because it helped defend the territory during World War II, which has since been annexed, and that the United States needs the territory for national security purposes.
In his speech in Davos, Trump said the US would not use military force to take Greenland but called for “immediate negotiations”. “We want a piece of ice for global security, and they won’t give it,” Trump said. “We never asked for anything else.”
Their hike in rates came just hours after the European Parliament ratified the U.S.-EU tariff deal last summer, signaling that politicians are ready to take on Trump for the first time.
