Trump steps back from Greenland tariff threat

US President Donald Trump has backed away from plans to impose tariffs on European allies over Greenland, ruling out the use of force and saying a framework for a future deal on the strategically important Arctic territory has been reached.

Speaking in Davos, Trump on Wednesday abruptly softened weeks of rhetoric that had rattled NATO allies and raised fears of a transatlantic trade war, saying negotiations were now focused on security cooperation and access to critical minerals rather than territorial control.

Trump had threatened at the weekend to impose escalating tariffs on US-bound exports from eight European countries in an effort to pressure Denmark into allowing Washington to take control of Greenland, a semi-autonomous Danish territory with a population of about 57,000.

After meeting Mark Rutte, Trump said Western allies could reach a long-term arrangement that addressed US security concerns in the Arctic while countering growing Russian and Chinese activity in the region.

“It’s a deal that everybody’s very happy with,” Trump told reporters. “It’s a long-term deal. It puts everybody in a really good position, especially as it pertains to security and to minerals.”

He later said on Truth Social that the United States and NATO had “formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” adding that, based on this understanding, he would not impose tariffs scheduled to take effect on February 1.

No talks on sovereignty, NATO says

Rutte said the question of Greenland’s sovereignty did not feature in his discussions with Trump.

“That issue did not come up anymore in my conversations tonight with the president,” Rutte said in an interview on Fox News, adding that Trump’s focus was on how allies could protect the Arctic as geopolitical competition intensifies.

A NATO spokesperson said negotiations between Denmark, Greenland and the United States would continue, aimed at ensuring Russia and China do not gain an economic or military foothold on the island. No timetable or venue for talks was announced.

Diplomatic sources said there was no agreement granting the United States ownership or control of Greenland, a demand Trump has repeatedly raised in public but which has been rejected by both Denmark and Greenlandic leaders.

Denmark stresses sovereignty

Denmark welcomed the easing of tensions but said any discussions must respect Greenland’s status.

“What is crucial for us is that we end this with respect for the integrity and sovereignty of the Kingdom of Denmark and the right of the Greenlandic people to self-determination,” Danish Foreign Minister Lars Lokke Rasmussen told public broadcaster DR.

Greenland’s government did not immediately respond to requests for comment.

Trump said he had tasked Vice President JD Vance, Secretary of State Marco Rubio and envoy Steve Witkoff to continue discussions with allies.

Russia played down the developments, with President Vladimir Putin quoted by Russian news agencies as saying Greenland was of no consequence to Moscow.

Earlier in the day, Trump ruled out the use of military force during a speech at the World Economic Forum, acknowledging that markets had been unsettled by his comments.

“People thought I would use force, but I don’t have to use force,” Trump said. “I don’t want to use force. I won’t use force.”

US stocks rose sharply following the shift in tone, with the S&P 500 posting its biggest one-day gain in two months. Markets had sold off earlier in the week after Trump renewed threats over Greenland.

Davos dominated by Trump rhetoric

Trump’s remarks on Greenland dominated his appearance in Davos, where he also criticised European allies over energy policy, immigration and defence spending, and took aim at countries including Britain, France, Canada and Switzerland over trade and economic grievances.

While stepping back from tariffs and force, Trump reiterated his belief that only the United States could guarantee Greenland’s security, referring to the acquisition of the territory as a “small ask” despite objections from Denmark and Greenland.

Sources familiar with the matter have previously told Reuters that Trump’s push on Greenland is driven in part by a desire to secure strategic advantages in the Arctic, including missile defence coverage and access to rare earth minerals critical for advanced technologies.

Trump is expected to continue bilateral meetings with world leaders during the Davos trip, including talks with Ukrainian President Volodymyr Zelenskiy, as he seeks support for his proposed “Board of Peace” initiative aimed at resolving global conflicts.

-With Reuters