The nice Greenland battle of 2026 seems to be on maintain for the second.
This week’s World Financial Discussion board in Davos has been largely overshadowed by President Donald Trump’s demand that the US take management of the Danish territory of Greenland, which set off a quickly escalating disaster. Heading into the convention, Trump threatened to impose 10 % tariffs on “any and all items” from eight European nations, together with Denmark, until a deal was reached to promote Greenland to the US, and he pointedly refused to rule out utilizing navy pressure to take the island — successfully threatening to invade a NATO ally. “There could be no going again,” Trump posted on social media on Tuesday.
On Wednesday, nevertheless, Trump seemingly went again. In an in any other case combative, Europe-bashing speech at Davos on Wednesday, he appeared to retreat from the specter of utilizing navy pressure, although he didn’t rule it out totally. (In any occasion, because the New York Occasions reported on Tuesday, the Pentagon has not really been tasked with drawing up Greenland invasion plans.) Then, later within the day, after a gathering with NATO Secretary Common Mark Rutte, Trump tweeted that he wouldn’t be imposing the tariffs in any case, saying, vaguely, that the “framework of a future take care of respect to Greenland” had been reached and that there could be ongoing talks in regards to the territory and its position within the proposed Golden Dome missile protection system. Some studies counsel the US could also be given sovereignty over small areas of Greenland the place it might construct navy bases.
This seems to be precisely the kind of face-saving deal European leaders had been hoping for. Trump can declare a win, although it’s not fairly clear what he gained, since Denmark was open to talks in regards to the US navy presence in Greenland from the beginning, with out US sovereignty. The US operates tons of of navy bases in additional than 70 nations with out offers like this. However it seems that the overwhelming majority of Greenland and its inhabitants will stay below Danish sovereignty in the interim.
However whereas everybody concerned may be respiration simpler within the short-term, the rifts uncovered by this episode might completely change the connection between the US and its allies. Europe, which beforehand had regarded to accommodate Trump, defused the disaster by confronting the president with more durable speak and extra concrete threats this time, and European diplomats are already citing the settlement as the results of their extra assertive posture. Wanting forward, some leaders at the moment are speaking a few world by which the US not solely surrenders its management place within the free world, but additionally turns into a possible risk together with international rivals like Russia and China. They should assume that is, at greatest, a lull earlier than the subsequent trans-Atlantic blow-up.
“Europeans are slowly, slowly exhibiting indicators of getting the message,” Nick Witney, former chief govt of the European Protection Company, advised Vox. “The message being, after all, that the USA below this administration just isn’t an ally of Europe, and is definitely an enemy of Europe. Let’s be trustworthy.”
Probably the most notable takeaway from the Greenland affair could also be that the Europeans are literally able to standing as much as stress from Trump.
You wouldn’t have assumed this to be the case primarily based on how they reacted to Trump’s earlier rhetoric and coverage pronouncements. Final July the EU agreed to a lopsided commerce take care of the US that was broadly seen as a capitulation from European Fee chief Ursula von der Leyen. In these talks, von der Leyen was hobbled by a scarcity of consensus from member states on how laborious to barter (a perennial subject for the 27-member bloc) in addition to a need to maintain Trump from strolling away totally from US assist for Ukraine. That have, in addition to the June summit at which NATO members agreed to Trump’s calls for to pledge to spend 5 % of their GDP on protection, could have given the president and his advisers confidence that the Europeans would fold.
“I get the vibe in DC that Europe is weak and it demonstrated that final yr,” mentioned Tobias Gehrke, a senior coverage fellow on the European Council on International Relations. This time round, he says, the stakes had been totally different with precise NATO territory on the road. “It’s about sovereignty, not simply economics. [If Trump succeeded] it will show to the whole world that European sovereignty is conditional in the event that they’re pressured just a bit bit.”
The EU’s first response was to droop parliamentary approval of the commerce deal reached final July. If this disaster had continued, it might have additionally responded to US tariffs with tariffs of its personal on items like US plane, automobiles, and alcohol.
French President Emmanuel Macron had additionally known as for the EU to think about implementing the Anti-Coercion Instrument — the so-called “bazooka” of financial retaliation choices. Created in 2023 within the wake of a Chinese language financial stress marketing campaign towards Lithuania, the ACI might permit the EU to take a collection of measures together with denying American service suppliers — reminiscent of tech firms — entry to the European market. This could most likely solely have been thought-about at a later date.
Additionally within the long-term choices file could be for Europe to encourage holders of US Treasurys — reminiscent of public pension funds — to divest, a transfer that might drive up American rates of interest. Even simply this week, there was a extra restricted international selloff of US Treasury bonds as buyers grew to become spooked by the standoff, a growth the White Home absolutely seen.
Mujtaba Rahman, managing director for Europe at Eurasia Group, famous that the rationale European leaders are exhibiting extra spine this time is “not solely as a result of EU capitals are minded to defend the ‘world order’…but additionally as a result of many are coming round to the view that lodging of Trump just isn’t the proper technique.”
And it’s not simply over Greenland: He pointed to Macron’s refusal to hitch the president’s “Board of Peace,” a proposed physique to supervise Gaza’s reconstruction (although Trump appears to ascertain a a lot broader mandate for it) that will require everlasting members to pony up $1 billion for the president to regulate, and Trump’s risk to slap 200 % tariffs on French wines due to it, as proof that Europeans are extra keen to indicate some spine.
As Belgian Prime Minister Bart de Wever put it, ““We tried to appease the brand new president within the White Home. … however now, so many crimson strains are being crossed that you’ve got the selection between your self-respect — being a contented vassal is one factor, being a depressing slave is one thing else.”
Alternatively, Rutte, who raised eyebrows in June by referring to Trump as “daddy” at a NATO summit, seems to have settled into the position of excellent cop in talks with the US and continued to reward Trump’s management right this moment. There’s nonetheless a task for flattery when mixed with credible deterrence.
What number of of its threatened financial strikes Europe would really observe by on is an open query. However judging by the 870-point fall within the Dow Jones on Tuesday, the markets had been taking the prospect of a commerce battle over Greenland severely.
Even Trump acknowledged that, saying “Our inventory market took the primary dip yesterday due to Iceland. So Iceland’s already value us some huge cash.” (You’re studying that quote appropriately, Trump appeared to confuse the 2 northern islands.)
European leaders’ threats that aggression over Greenland might mark the tip of NATO don’t seem to have had a lot affect on Trump, who doesn’t care a lot for multilateral alliances typically and NATO particularly. However a market dip is a unique story. US shares rebounded sharply on Wednesday after the framework deal was introduced.
Whereas this disaster could have abated, this week was nonetheless seemingly one thing of a turning level. “We’re within the midst of a rupture, not a transition,” as Canadian Prime Minister Mark Carney put it in a dramatic speech at Davos.
What does that rupture appear to be in follow? Maybe it’s conventional US allies hedging by enhancing relations with different powers. Canada introduced a landmark commerce take care of China on electrical autos and different items final week. The British authorities permitted a controversial Chinese language “mega-embassy” in London. Trump’s stress marketing campaign towards the EU mixed with the “Donroe Doctrine” in Latin America seemingly accelerated the greenlighting of a commerce deal between the EU and the South American commerce bloc Mercosur this month.
It’s additionally more likely to speed up efforts to cut back Ukraine’s reliance on US assist within the battle with Russia. Just some weeks in the past, European leaders had been hailing an settlement for the US to present a “backstop” for postwar safety ensures for Ukraine. The concept of those governments calling for the US to supply safety ensures on Europe’s jap flank whereas caring in regards to the US as a real safety risk on its western flank requires a level of cognitive dissonance. In keeping with a latest assertion by Macron, France is now offering two-thirds of Ukraine’s intelligence data, supplanting the USA. There have been issues all through this newest disaster that Trump might try and leverage US assist for Ukraine to stress Europe into concessions in Greenland, and it’s seemingly additional steps shall be taken to weaken that potential weapon.
“Europeans should type of assume that NATO is type of a useless man strolling as an alliance,” mentioned Dalibor Rohac, a senior fellow researching European politics on the American Enterprise Institute. Rohac thinks the implications of this realization in a world the place Russian aggression remains to be a potent and ever-present risk could possibly be dramatic.
“I believe they’ll must get their very own nuclear deterrent that’s larger and fewer depending on the US than what the UK has now,” he mentioned. “I wouldn’t be shocked if we now have nuclear Germany and Poland in 15 years.”
Witney, the previous EU protection official, mentioned the rift with the USA is more likely to provoke a change in mindset in European capitals, however that, the EU being what it’s, we shouldn’t count on it to occur too rapidly. “It’s very laborious for the Europeans to react in actual time to this kind of enterprise,” he added. Governments in southern and southeastern Europe have notably been far much less keen to speak robust throughout this standoff, and even in nations just like the UK, Germany, and Scandinavia, trans-Atlantic tendencies will die laborious and there shall be hope issues can return to regular.
“It’s a troublesome factor to get your head round, 80 years and all that.” Witney mentioned, referring to the post-war trans-Atlantic alliance. “Many of the senior of us in Europe are child boomers, and all we child boomers have recognized in our lucky lives is a novel interval in historical past that seems to be an entire aberration.”
