In an abrupt about-face, President Donald Trump quickly toned down the rhetoric of recent days regarding the United States taking control of Greenland.
While addressing the World Economic Forum in Davos, Switzerland, Trump plainly stated that taking the island by force was off the table, as was his earlier threat of imposing tariffs, and that a deal to end the dispute was in sight.
“We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” Trump wrote on his Truth Social platform. “Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st.”
While ruling out the use of force and squashing the tariff threat, the previously skittish financial markets responded, with the Dow jumping nearly 600 points, wiping out most of its losses from the previous day. The S&P 500 and the Nasdaq gained 1.16% and 1.18%, respectively, recovering their previous losses as well.
For the week ending Jan. 23, the Dow fell roughly 0.5%, while the S&P posted a second consecutive weekly loss of 0.4%.
Trump offered no immediate details of the supposed deal in the works, other than stating that Vice President JD Vance, Secretary of State Marco Rubio and special envoy Steve Witkoff would take part in the discussions and would make more information available as talks progressed.
In addition to spooking the markets, Trump’s saber-rattling also raised eyebrows among some of his staunchest European supporters, including many on the far right and more populist leaders usually aligned with him.
The Trump administration has openly supported European parties that share similar positions on issues ranging from climate change to immigration.
Alice Weidel of the far-right Alternative for Germany said:
“Donald Trump has violated a fundamental campaign promise—namely, not to interfere in other countries.”
Party co-leader Tino Chrupalla referred to Trump’s barnstorming as “Wild West methods.”
President of the National Rally party Jordan Bardella, often praised by the Trump administration, said on Tuesday that Europe must react, referring to “anti-coercion measures” and the suspension of the economic agreement signed last year between the EU and the United States.
Nigel Farage, leader of Britain’s populist party Reform UK, who has long complimented and favored Trump, bristled at Trump’s latest threat:
“…to use economic threats against the country that’s been considered to be your closest ally for over a hundred years is not the kind of thing we would expect,” according to a public statement issued last weekend.
However, not all populist or far-right European leaders have been so critical.
Both the far-right Dutch Party for Freedom and Spain’s Vox praised Trump for his actions against Venezuela but have remained quiet on Greenland, while Polish President Karol Nawrocki and Hungary’s Prime Minister Viktor Orbán have called for the issue of Greenland to be settled bilaterally between the United States and Denmark.
Italian Prime Minister Giorgia Meloni has made public her desire to be a mediator between Trump and the European Union.
“The prospect of higher tariffs for those contributing to the security of Greenland is, in my view, a mistake and I obviously do not share that position,” the Italian prime minister told reporters in Seoul on Sunday.
Meloni has made clear that she is ideologically close to Trump and expressed that Europe shares the same security concerns as the U.S. concerning the Arctic.
“I agree with the focus the U.S. administration has on Greenland and the Arctic in general,” she said. “Clearly it seems that there’s been a problem of understanding and communication.”
Meloni and her team have been privately taken aback by some of Trump’s policies, but she has refrained from public criticism of the president.
Meloni stated she would not condone any use of force by the U.S. involving Greenland, but also understands the strategic importance of the island and that it should be protected from Russian and Chinese threats.
“I also believe there’s a problem in interpreting what was being done,” she said on Sunday.
Trump, she added, was “interested in listening but, it appears to me, from a U.S. point of view, the message from this side of the Atlantic hadn’t been clear.”
Trump himself appeared much more sanguine after meeting with NATO Secretary General Mark Rutte at Davos, stating that the deal would satisfy his desire for a “Golden Dome” missile defense system and allow access to critical minerals, while denying Russian and Chinese ambitions in the region.
“It’s a deal that everybody’s very happy with,” Trump told reporters. “It’s a long-term deal. It’s the ultimate long-term deal. It puts everybody in a really good position, especially as it pertains to security and to minerals.”
“It’s a deal that’s forever,” he added.
Some say Trump’s turn is a product of his strategy of playing hardball and threatening stern repercussions, only to pull back once he gets what he wants. Others say it was the EU taking a firm stand and not backing down from Greenland’s status as an autonomous territory of Denmark being non-negotiable.
Either way, with Trump taking an increasingly strident position in all matters involving U.S. interests, the EU is discovering that it may have more leverage than previously thought.
For instance, in protest of Trump’s threats on Greenland, EU leaders shelved last year’s EU-U.S. trade deal prior to the Davos meetings, only to put the deal back on track once Trump announced military force and tariffs were off the table.
“Despite all the frustration and anger of recent months, let us not be too quick to write off the transatlantic partnership,” German Chancellor Friedrich Merz said in Davos beforehand.
Additionally, Europe looks to toughen its own economic policy.
Next month, it will kick-start legislation that will include “Made in Europe” requirements in strategic sectors and strengthen conditionality clauses for any foreign direct investment in the EU.
The impact of the U.S. tariffs is not yet clear, as companies front-loaded exports last year ahead of the new levies, but recent data shows that, for example, German companies nearly halved investments in the U.S. in 2025.
