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Europe Stands United to Avert Trade War After Trump’s Greenland Tariff Threat
A sudden threat by former US President Donald Trump to impose tariffs to seize Greenland sent Europe scrambling to protect the transatlantic alliance. For five tense days, Trump warned he would apply a 10% tariff on eight NATO member states unless Denmark agreed to sell the semi-autonomous, mineral-rich island.
“This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland,” Trump wrote on social media, prompting widespread condemnation from European leaders defending Denmark’s sovereignty.
EU ambassadors met the following day to prepare for 1 February, when the tariffs were set to take effect. France took the lead, calling for the use of the Anti-Coercion Instrument, which allows retaliation across multiple economic sectors. Previously designed for China, the mechanism had never been used, even amid Trump’s 2025 trade negotiations, which divided EU member states.
“Plunging us into a dangerous downward spiral would only aid the very adversaries we are both so committed to keeping out of our strategic landscape,” European Commission President Ursula von der Leyen said in Davos. “So our response will be unflinching, united and proportional.”
European capitals quickly prepared for potential retaliation, drafting a €93 billion list of countermeasures. The European Parliament also voted to indefinitely delay the ratification of the EU-US trade deal, blocking zero-tariff benefits for American products agreed in July.
Despite this display of unity, European leaders emphasized diplomacy as their preferred path. German Chancellor Friedrich Merz said, “We want to avoid any escalation in this dispute if at all possible. We simply want to try to resolve this problem together.” Finnish President Alexander Stubb described the effort as finding an “off-ramp” to prevent a full-blown clash while safeguarding Greenland.
Early diplomatic overtures faltered. Bilateral meetings with Trump at Davos failed to materialize, and leaks of texts, including one from French President Emmanuel Macron, highlighted the confusion. Trump’s statements at the World Economic Forum, in which he repeatedly referred to Greenland as “Iceland,” kept tensions high.
Yet his insistence that he did not plan to use military force opened a narrow window for negotiation. NATO Secretary General Mark Rutte met with Trump in Davos to establish a “framework deal” enhancing security in Greenland and the Arctic. The agreement, details of which remain confidential, prompted Trump to abandon his tariff threat and territorial ambitions.
By the time EU leaders convened in Brussels for an emergency summit, the atmosphere had eased. Danish Prime Minister Mette Frederiksen later traveled to Nuuk to ensure Denmark and Greenland were included in the discussions.
“Everybody has drawn the conclusion that the relationship is on a different footing,” a senior EU official said, acknowledging the long-term implications of Trump’s actions. Macron praised Europe’s display of unity, while von der Leyen warned the episode underscored the need for a more independent Europe with diverse international partnerships.
While the immediate crisis passed, the Greenland episode left a lasting mark on transatlantic relations and Europe’s approach to US unpredictability.
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SpaceX Announces $100 Billion Louisiana Starbase to Expand Starship Launches
Elon Musk’s SpaceX has announced plans to build its largest launch facility yet in Louisiana, a $100 billion project designed to support thousands of Starship missions each year and significantly expand the company’s presence beyond Texas and Florida.
The new facility, named Starbase, Louisiana, will cover about 125,000 acres, or 50,585 hectares, in the southern US state. Construction is expected to begin next year, with SpaceX targeting its first Starship launch from the site in 2029.
SpaceX said the facility would support missions to Earth orbit, the Moon, Mars and beyond. The project forms part of the company’s broader plans to increase launch capacity as it pursues ambitious goals in space exploration, satellite services and artificial intelligence.
The company said the Louisiana base would create more than 3,000 direct jobs. Louisiana Economic Development estimates that a further 8,100 indirect jobs could also be created through related economic activity.
According to the agency, workers at the facility are expected to earn average wages nearly three times higher than the current regional average. Officials said the project could establish Louisiana as a major centre for next-generation aerospace operations.
“The historic project will establish Louisiana as a global hub for next-generation aerospace, with the capacity and infrastructure needed to dramatically increase launch frequency and expand access to space,” the Louisiana Economic Development agency said.
The Louisiana site will share its name with SpaceX’s existing Starbase operations in Texas. In 2025, residents in part of Cameron County, where the company carries out testing and development work, voted to incorporate the area as a city called Starbase.
The announcement comes as SpaceX pursues an aggressive expansion strategy. Musk has outlined plans for missions to Mars, expanded Starship operations and major investments in artificial intelligence and computing infrastructure.
Earlier this month, SpaceX and Musk’s electric vehicle and robotics company Tesla announced plans to build a $16.8 billion AI chip manufacturing complex in Texas known as Terafab. The proposed facility is intended to support growing demand for computing power for AI, robotics and related technologies.
SpaceX is also facing increasing scrutiny from investors following its public market debut in June, when its shares began trading on the technology-focused Nasdaq in what was described as the largest stock market debut in history.
The company’s stock has fallen more than 30% from the highs reached shortly after trading began, although it remains above its initial offer price of $135.
Investors are now watching whether SpaceX can balance the enormous cost of its expansion with the need to deliver sustained profits. The planned Louisiana Starbase represents one of the company’s biggest commitments yet, with construction expected to begin in 2027 and launch operations scheduled to follow two years later.
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