The great Greenland war of 2026 appears to be on hold for the moment.
This week’s World Economic Forum in Davos has been largely overshadowed by President Donald Trump’s demand that the US take control of the Danish territory of Greenland, which set off a rapidly escalating crisis. Heading into the conference, Trump threatened to impose 10 percent tariffs on “any and all goods” from eight European countries, including Denmark, unless a deal was reached to sell Greenland to the US, and he pointedly refused to rule out using military force to take the island — effectively threatening to invade a NATO ally. “There can be no going back,” Trump posted on social media on Tuesday.
On Wednesday, however, Trump seemingly went back. In an otherwise combative, Europe-bashing speech at Davos on Wednesday, he seemed to retreat from the threat of using military force, though he didn’t rule it out entirely. (In any event, as the New York Times reported on Tuesday, the Pentagon has not actually been tasked with drawing up Greenland invasion plans.) Then, later in the day, after a meeting with NATO Secretary General Mark Rutte, Trump tweeted that he would not be imposing the tariffs after all, saying, vaguely, that the “framework of a future deal with respect to Greenland” had been reached and that there would be ongoing talks about the territory and its role in the proposed Golden Dome missile defense system. Some reports suggest the US may be given sovereignty over small areas of Greenland where it could build military bases.
This appears to be exactly the sort of face-saving deal European leaders had been hoping for. Trump can claim a win, though it’s not quite clear what he won, since Denmark was open to talks about the US military presence in Greenland from the start, without US sovereignty. The US operates hundreds of military bases in more than 70 countries without deals like this. But it appears that the vast majority of Greenland and its inhabitants will remain under Danish sovereignty for the time being.
But while everyone involved might be breathing easier in the short-term, the rifts exposed by this episode could permanently change the relationship between the US and its allies. Europe, which previously had looked to accommodate Trump, defused the crisis by confronting the president with tougher talk and more concrete threats this time, and European diplomats are already citing the agreement as the result of their more assertive posture. Looking ahead, some leaders are now talking about a world in which the US not only surrenders its leadership position in the free world, but also becomes a potential threat along with global rivals like Russia and China. They have to assume this is, at best, a lull before the next trans-Atlantic blow-up.
“Europeans are slowly, slowly showing signs of getting the message,” Nick Witney, former chief executive of the European Defense Agency, told Vox. “The message being, of course, that the United States under this administration is not an ally of Europe, and is actually an enemy of Europe. Let’s be honest.”
The union strikes back
The most notable takeaway from the Greenland affair may be that the Europeans are actually capable of standing up to pressure from Trump.
You would not have assumed this to be the case based on how they reacted to Trump’s previous rhetoric and policy pronouncements. Last July the EU agreed to a lopsided trade deal with the US that was widely seen as a capitulation from European Commission chief Ursula von der Leyen. In those talks, von der Leyen was hobbled by a lack of consensus from member states on how hard to negotiate (a perennial issue for the 27-member bloc) as well as a desire to keep Trump from walking away entirely from US support for Ukraine. That experience, as well as the June summit at which NATO members agreed to Trump’s demands to pledge to spend 5 percent of their GDP on defense, may 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 last year,” said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations. This time around, he says, the stakes were different with actual NATO territory on the line. “It’s about sovereignty, not just economics. [If Trump succeeded] it would demonstrate to the entire world that European sovereignty is conditional if they’re pressured just a little bit.”
The EU’s first response was to suspend parliamentary approval of the trade deal reached last July. If this crisis had continued, it could have also responded to US tariffs with tariffs of its own on goods like US aircraft, cars, and alcohol.
French President Emmanuel Macron had also called for the EU to consider implementing the Anti-Coercion Instrument — the so-called “bazooka” of economic retaliation options. Created in 2023 in the wake of a Chinese economic pressure campaign against Lithuania, the ACI could allow the EU to take a series of measures including denying American service providers — such as tech companies — access to the European market. This would probably only have been considered at a later date.
Also in the long-term options file would be for Europe to encourage holders of US Treasurys — such as public pension funds — to divest, a move that could drive up American interest rates. Even just this week, there was a more limited global selloff of US Treasury bonds as investors became spooked by the standoff, a development the White House surely noticed.
Mujtaba Rahman, managing director for Europe at Eurasia Group, noted that the reason European leaders are showing more backbone this time is “not only because EU capitals are minded to defend the ‘world order’…but also because many are coming around to the view that accommodation of Trump is not the right strategy.”
And it’s not just over Greenland: He pointed to Macron’s refusal to join the president’s “Board of Peace,” a proposed body to oversee Gaza’s reconstruction (though Trump seems to envision a much broader mandate for it) that would require permanent members to pony up $1 billion for the president to control, and Trump’s threat to slap 200 percent tariffs on French wines because of it, as evidence that Europeans are more willing to show some backbone.
As Belgian Prime Minister Bart de Wever put it, ““We tried to appease the new president in the White House. … but now, so many red lines are being crossed that you have the choice between your self-respect — being a happy vassal is one thing, being a miserable slave is something else.”
On the other hand, Rutte, who raised eyebrows in June by referring to Trump as “daddy” at a NATO summit, appears to have settled into the role of good cop in talks with the US and continued to praise Trump’s leadership today. There’s still a role for flattery when combined with credible deterrence.
How many of its threatened economic moves Europe would actually follow through on is an open question. But judging by the 870-point fall in the Dow Jones on Tuesday, the markets were taking the prospect of a trade war over Greenland seriously.
Even Trump acknowledged that, saying “Our stock market took the first dip yesterday because of Iceland. So Iceland’s already cost us a lot of money.” (You’re reading that quote correctly, Trump seemed to confuse the two northern islands.)
European leaders’ threats that aggression over Greenland could mark the end of NATO don’t appear to have had much impact on Trump, who doesn’t care much for multilateral alliances in general and NATO in particular. But a market dip is a different story. US stocks rebounded sharply on Wednesday after the framework deal was announced.
Long-term damage
While this crisis may have abated, this week was still likely something of a turning point. “We are in 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 look like in practice? Perhaps it’s traditional US allies hedging by improving relations with other powers. Canada announced a landmark trade deal with China on electric vehicles and other goods last week. The British government approved a controversial Chinese “mega-embassy” in London. Trump’s pressure campaign against the EU combined with the “Donroe Doctrine” in Latin America likely accelerated the greenlighting of a trade deal between the EU and the South American trade bloc Mercosur this month.
It’s also likely to accelerate efforts to reduce Ukraine’s reliance on US support in the war with Russia. Just a few weeks ago, European leaders were hailing an agreement for the US to provide a “backstop” for postwar security guarantees for Ukraine. The idea of these governments calling for the US to provide security guarantees on Europe’s eastern flank while being concerned about the US as a genuine security threat on its western flank requires a degree of cognitive dissonance. According to a recent statement by Macron, France is now providing two-thirds of Ukraine’s intelligence information, supplanting the United States. There have been concerns throughout this latest crisis that Trump could attempt to leverage US support for Ukraine to pressure Europe into concessions in Greenland, and it’s likely further steps will be taken to weaken that potential weapon.
“Europeans have to kind of assume that NATO is kind of a dead man walking as an alliance,” said Dalibor Rohac, a senior fellow researching European politics at the American Enterprise Institute. Rohac thinks the consequences of this realization in a world where Russian aggression is still a potent and ever-present threat could be dramatic.
“I think they’ll need to get their own nuclear deterrent that is bigger and less dependent on the US than what the UK has now,” he said. “I wouldn’t be surprised if we have nuclear Germany and Poland in 15 years.”
Witney, the former EU defense official, said the rift with the United States is likely to provoke a change in mindset in European capitals, but that, the EU being what it is, we shouldn’t expect it to happen too quickly. “It’s very hard for the Europeans to react in real time to this sort of business,” he added. Governments in southern and southeastern Europe have notably been far less willing to talk tough during this standoff, and even in countries like the UK, Germany, and Scandinavia, trans-Atlantic tendencies will die hard and there will be hope things can return to normal.
“It’s a difficult thing to get your head around, 80 years and all that.” Witney said, referring to the post-war trans-Atlantic alliance. “Most of the senior folks in Europe are baby boomers, and all we baby boomers have known in our fortunate lives is a unique period in history that turns out to be a complete aberration.”
