President Donald Trump has abruptly canceled the tariff he had threatened to impose on eight European countries after days of rising tension over Greenland. Only a short time earlier, Trump had insisted the United States needed the island and had even spoken about wanting it “including right, title and ownership.” His remarks and the threatened tariff caused serious concern in Europe and unsettled financial markets.
A sudden tariff reversal cools a fast-growing dispute
Trump designed the tariffs to pressure Denmark and other European allies and planned to start them at 10 percent next month, raising them to 25 percent by June. The move would have made many imports more expensive and could have triggered a major trade conflict between the U.S. and Europe.
Trump canceled the plan after saying he had reached a “framework of a future deal” with NATO’s secretary general on Arctic security. He shared few details, but shortly before his announcement, NATO chief Mark Rutte said the alliance would stand with the U.S. if it were attacked.
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This was not the first time Trump backed away from tariff threats. The decision came days after his Davos speech, where he focused on Greenland and suggested the U.S. could use great strength. Denmark’s foreign minister welcomed the pause in the trade dispute and said talks could continue while protecting Danish sovereignty.
Why Greenland matters and what NATO discussed
Greenland is a large Arctic island and a semi-autonomous territory of Denmark. Although it has a small population, its location makes it very important for military and strategic planning. Interest in the Arctic has grown as Russia and China increase their activity in the region.
The United States already has a major military base in Greenland. Trump has said the U.S. needs a stronger position there to protect itself and its allies. Earlier, he threatened to impose heavy tariffs on Denmark and seven other European countries unless they agreed to negotiate over the territory.
According to a European official familiar with the talks, one idea discussed inside NATO was for Denmark and the alliance to work with the U.S. to build more American military bases on the island. This plan would increase the U.S. presence without changing who controls Greenland, though officials did not confirm whether the agreement Trump mentioned includes this idea.
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Trump also said officials are holding more talks about Greenland in connection with the “Golden Dome” missile defense program, a huge project that could cost about $175 billion and would place some U.S. weapons in space for the first time.
European leaders rejected Trump’s earlier stance, saying Greenland is not for sale. A Danish official said Copenhagen was open to security talks but insisted that Denmark’s control over the island was a firm red line. Trump’s comments also raised doubts about NATO, making the alliance chief’s public support for the U.S. especially important.
How Greenland’s people and markets reacted
While leaders were arguing, people in Greenland were preparing. The local government published a guide telling citizens how to get ready for emergencies. It advised residents to keep enough food, water, fuel, and other supplies to last at least five days.
In the capital, Nuuk, many residents went shopping for basic items such as candles and packaged food. One resident said Trump was probably making threats, but added that people should prepare rather than take chances.
Another resident said Trump insulted Greenland by speaking about it as if it were only a piece of ice. He explained that people in Greenland are used to harsh conditions, but said this situation felt different because politics caused it.
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Before he backed down, Trump urged Denmark and NATO to step aside and warned that the United States would “remember” if they refused. He also called for immediate negotiations to acquire Greenland but declined to name a price, saying security mattered more than money.
After the tariff threats, financial markets fell sharply, but they quickly recovered once Trump canceled the tariffs. Many officials in both Europe and the United States also expressed relief, because they feared the dispute could damage long-standing alliances. Trump had planned his Davos speech around U.S. housing costs, but Greenland dominated his remarks, even as he mistakenly referred to it as Iceland several times.