In a surprising turn of events on January 21, 2026, President Donald Trump announced he was dropping planned tariffs on several European countries tied to his push for the United States to acquire Greenland. The decision came after Trump reached what he described as a “framework of a future deal” with NATO Secretary General Mark Rutte during meetings at the World Economic Forum in Davos, Switzerland.
Trump shared the update on his Truth Social platform, writing: “Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region… Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st.”
The tariffs, which Trump had threatened just days earlier, would have started at 10% on imports from eight European nations—including Denmark and others—and risen to 25% by June 1 if no agreement was reached on Greenland. Greenland, an autonomous territory under Danish sovereignty, has long been of strategic interest to the U.S. due to its location, natural resources, and military importance in the Arctic.
The tariff threat had caused major ripples. Markets reacted with volatility, and European leaders pushed back strongly. The European Parliament paused ratification of a trade deal with the U.S., and EU officials discussed potential retaliatory tariffs worth up to $108 billion on American goods. French President Emmanuel Macron called Europe’s stance firm, rejecting any bullying and hinting at tools like the EU’s Anti-Coercion Instrument to respond.
In his Davos keynote address, Trump called for “immediate negotiations” on Greenland but made clear he was ruling out military force to take the territory. “You can say yes, and we will be very appreciative, or you can say no, and we will remember,” he said, emphasizing cooperation over confrontation.
The “framework” deal remains vague. Trump has called it a “concept” or “long-term deal” that could benefit both the U.S. and NATO allies, possibly involving U.S. access to Greenland’s mineral resources, collaboration on Arctic security (like a proposed Golden Dome missile defense system), or broader regional partnerships. NATO’s Rutte and other European officials have been more cautious, noting that “a lot of work remains to be done” and stressing respect for Danish sovereignty over Greenland. Danish leaders and Greenlandic voices expressed skepticism, viewing the announcement as more of a de-escalation than a concrete agreement.
U.S. Treasury Secretary Scott Bessent, speaking at Davos, downplayed market concerns over the dispute. He dismissed worries about European investors—particularly from Denmark—selling off U.S. Treasuries in protest, calling Danish holdings “irrelevant” and small (under $100 million). “I’m not concerned at all,” Bessent said, pointing to strong foreign demand in recent Treasury auctions. He also criticized Macron’s comments as “inflammatory” and urged critics to “take a deep breath” and hear Trump’s full case.
The Supreme Court has yet to rule on related cases challenging the legality of Trump’s broader tariff powers, with no decisions issued in early 2026 opportunities.
Trump’s reversal eased immediate tensions across the Atlantic, allowing markets to rebound somewhat and averting a potential trade war with key allies. However, the underlying question of Greenland’s future—and U.S. ambitions in the Arctic—remains unresolved, with negotiations likely to continue amid ongoing transatlantic strains.
