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Donald Trump said he was dropping his threat to hit European countries with new tariffs after striking “the framework of a future deal” over Greenland in talks with Nato’s secretary-general Mark Rutte.
The US president on Wednesday said he had held a “very productive” meeting with Rutte and would hold future talks and find a solution that “if consummated” would be a “great one” for the US and Nato members.
“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” Trump wrote on Truth Social. “Additional discussions are being held concerning The Golden Dome as it pertains to Greenland,” he added, referring to his planned missile defence system.
“We took that off the table,” Trump added in an interview with CNBC later on Wednesday, referring to his threat to impose tariffs on European countries opposed to a US takeover of Greenland. “Because we had pretty much the concept of a deal.”
He added the framework agreement could involve Greenland’s natural resources. “They’re going to be involved in mineral rights and so are we.”
Vice-president JD Vance, secretary of state Marco Rubio and the president’s special envoy Steve Witkoff would hold further negotiations. The agreement would last “forever”, Trump said.
His comments marked another reversal of a tariff threat and a significant softening of his stance on Greenland. They came hours after he told an audience at the World Economic Forum in Davos that he would not use force to acquire the territory from Denmark — but told Europe to back his plan.
Europeans had a choice over Greenland, he said: “You can say yes and we will be very appreciative, or you can say no and we will remember.”
Nato said: “Discussions among Nato allies on the framework the president referenced will focus on ensuring Arctic security through the collective efforts of allies, especially the seven Arctic allies.”
The western military alliance added “negotiations between Denmark, Greenland and the United States will go forward aimed at ensuring that Russia and China never gain a foothold — economically or militarily — in Greenland”.
Rutte told Fox News on Wednesday evening that he and Trump did not discuss whether Greenland would remain a part of the Kingdom of Denmark under the framework.
Trump’s threats to impose new tariffs on European countries had shaken the transatlantic relationship and raised fears of a new trade war, alarming markets.
The US president’s latest turnaround comes after Wall Street stocks recoiled on Tuesday when he threatened to open a new front in his global trade war. The S&P 500 share index posted its worst day since October, while US government bonds also came under pressure.
Market volatility has previously tamed Trump, including after his “liberation day” tariff announcement in April ignited serious tumult in stocks and Treasuries.
Stocks rallied on Wednesday after he dropped the threat of new levies, with the S&P 500 jumping 1.2 per cent. The price of US government debt also rose, pushing the yield on the benchmark 10-year Treasury note down 0.04 percentage points to 4.25 per cent.
Trump claimed his new deal just hours after he delivered a lengthy and at times rambling address in Davos.
He said in the speech that he was “seeking immediate negotiations” to discuss the acquisition of Greenland from Denmark, “just as we have acquired many other territories throughout our history”.
Denmark’s foreign minister Lars Løkke Rasmussen welcomed Trump’s Truth Social statement, saying “the day ends better than the day started”.
But he added: “It is not going to happen that the USA will own Greenland. That is a red line.”
Italian Prime Minister Giorgia Meloni, who has forged a warm personal bond with Trump, also hailed the decision, but said “it is essential to continue fostering dialogue between allied nations”.
Denmark and Greenland have repeatedly insisted the Arctic island is not for sale since Trump first expressed interest in 2019.
EU leaders will gather for an emergency summit in Brussels on Thursday to discuss their approach to talks on Greenland as concerns increase over the fraying relationship with Washington.
Trump also used his speech to berate an “unrecognisable” Europe, diminished by economic decline and unlimited immigration. “I love Europe . . . but it’s not heading in the right direction.”
His coercion of Denmark and its European partners has incensed European officials, with many claiming he has destroyed trust in the transatlantic relationship.
Canadian Prime Minister Mark Carney on Tuesday declared a “rupture” in the international order over Trump’s unbridled assertion of American power.
UK Prime Minister Sir Keir Starmer, who decided not to attend the WEF, accused Trump of “splitting the world at the moment with material consequences” through his plans to take over Greenland.
Tensions between European and US officials erupted in Davos on Tuesday night, when US commerce secretary Howard Lutnick was heckled at a dinner after making combative comments that led multiple guests to walk out.
Among those leaving the dinner early was European Central Bank president Christine Lagarde, said people familiar with the matter.
Earlier on Wednesday, hedge fund manager Ken Griffin criticised Trump, saying the US had “frayed our relationship with our European allies in ways that I don’t understand or appreciate”.
Additional reporting by Amy Kazmin in Rome
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