Trump steps back from Greenland tariff threats

US President Donald Trump on Wednesday abruptly retreated from threats to impose tariffs as leverage in a dispute over Greenland, ruling out the use of force and suggesting a negotiated agreement could be within reach, easing tensions that had threatened the most serious rupture in transatlantic relations in decades.

Speaking in Davos, Switzerland, Trump softened weeks of confrontational rhetoric that had unsettled NATO allies and raised fears of a new global trade war. At the weekend, he had warned of imposing escalating tariffs on US-bound exports from eight European countries over their opposition to his push to acquire the Danish territory.

After meeting NATO Secretary General Mark Rutte on the sidelines of the World Economic Forum, Trump said Western allies could strike a long-term deal over Greenland that would address US security concerns in the Arctic, including missile defence and access to critical minerals, while countering growing Russian and Chinese influence in the region.

Trump told reporters the agreement would put all parties “in a really good position,” describing it as a long-term arrangement focused on security and mineral resources. He later added that it would be a permanent deal.

Rutte said the question of Greenland’s sovereignty did not arise in his talks with Trump, noting that discussions instead focused on protecting the Arctic region amid increased activity by Russia and China.

European diplomats said Trump’s change in tone did not resolve the underlying dispute but helped to defuse an open rift between allies, allowing negotiations to continue behind closed doors. It remains unclear what form of agreement could satisfy Trump’s repeated calls for US “ownership” of Greenland, a position rejected by Greenland’s leaders and residents.

A NATO spokesperson said discussions among Denmark, Greenland and the United States would move forward with the aim of ensuring that Russia and China do not gain an economic or military foothold on the island. No timeline or location for the talks was announced. Trump said Vice President JD Vance, Secretary of State Marco Rubio and envoy Steve Witkoff would be involved in further negotiations.

Trump said on his Truth Social platform that the United States and NATO had formed a framework for a future agreement covering Greenland and the wider Arctic region, adding that tariffs scheduled to take effect on February 1 would not be imposed. The move marked the latest in a series of policy reversals ahead of self-imposed deadlines during his second term.

Denmark welcomed the easing of tensions but stressed that any resolution must respect Danish sovereignty and the Greenlandic people’s right to self-determination. Danish Foreign Minister Lars Lokke Rasmussen said the issue should be handled through private diplomacy rather than public statements.

Earlier in the day, Trump acknowledged that financial markets had reacted negatively to his earlier threats and told an audience at the World Economic Forum that he would not use force to pursue his objectives in Greenland.

The shift in posture helped lift US stocks, with the S&P 500 posting its biggest one-day gain in two months. Markets had sold off sharply a day earlier following Trump’s more hawkish comments.

Trump’s remarks on Greenland dominated his high-profile appearance in Davos, where he also criticised European governments on issues ranging from energy and trade to immigration and defence. Despite taking the threat of force off the table, he reiterated that the United States was uniquely positioned to secure Greenland and warned allies that Washington would remember their response to his demands.

Trump was expected to continue meetings with world leaders during the trip, including talks with Ukrainian President Volodymyr Zelenskiy, as he sought backing for a proposed Board of Peace initiative aimed at resolving global conflicts.