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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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Pakistan Signals Near-Completion of US-Iran Peace Deal as Negotiations Intensify
Pakistan’s Prime Minister Shehbaz Sharif said on Saturday that a proposed peace agreement between the United States and Iran was closer than ever to being finalised, with expectations that it could be completed within 24 hours. His remarks came amid heightened diplomatic activity involving multiple regional and international actors working to bridge long-standing differences between Washington and Tehran.
Iranian state media reported on Sunday that Tehran had not yet reached a final decision on the draft agreement aimed at ending tensions between the two countries. The uncertainty followed a series of statements suggesting that progress had accelerated significantly in recent days.
US President Donald Trump also indicated on Saturday that a deal was within reach, echoing optimism from mediators involved in the process, including Pakistan. In a post on his Truth Social account, Trump stated that the agreement was scheduled for signing the following day. He added that once completed, the Strait of Hormuz would be opened for unrestricted passage.
“Hopefully, this process will all work out quickly, easily, and smoothly. If it doesn’t, we have the ultimate alternative, hopefully never to be used again,” Trump said, while also emphasizing that the arrangement would prevent nuclear escalation.
Prime Minister Shehbaz Sharif, speaking earlier on Saturday, described the situation as being at its closest point to resolution. He said Pakistan was preparing for an electronic signing ceremony once final agreement was reached. According to his statement on X, technical-level discussions would continue in the days following the signing to ensure implementation of the deal’s provisions.
Diplomatic engagement continued on Sunday when a Qatari delegation arrived in Tehran. According to Iran’s Tasnim news agency, the delegation’s purpose was to review the latest developments related to the ongoing diplomatic process and maintain momentum in negotiations.
Central to the proposed agreement is Iran’s commitment to fully reopen the Strait of Hormuz, a critical maritime passage for global oil and gas shipments. Another key condition involves curbing Tehran’s nuclear program, which has been a longstanding point of contention in its relations with Western powers.
While optimism has grown among mediators, Iranian authorities have not confirmed final approval, leaving the outcome uncertain. Negotiations are expected to continue as involved parties attempt to resolve outstanding issues and move toward formal agreement.
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