In recent news, U.S. President Donald Trump, being true to form, has threatened to buy Greenland, an autonomous Danish territory. This incendiary statement has rung alarm bells across the transatlantic alliance, possibly putting its unity at great risk. Trump’s claims come as prepare for his trip to Zurich. There, he will be discussing European leadership on goodwill trumping intimidation and threat in today’s world of trade and diplomacy.
The president’s quixotic search for territory to buy in Greenland has raised the ire of European partners as well it should. Almost every leader we spoke with said they feared that his attacks might destroy the collaborative relationships built over decades. In 2019, Trump announced that he would levy tariffs on any European nation that stood in his way of acquiring Greenland. This drastic action might very well initiate a trade war with the European Union (EU).
Trump’s proposed tariffs include a 10% levy on imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. These tariffs are only based on these countries retracting their complaints about Trump’s Greenland dreams. The EU is already looking at a series of retaliatory actions. These measures would include a set of tariffs targeting $93 billion in U.S. imports. Additionally, discussions about the EU’s “anti-coercion instrument” are underway as a possible response to Trump’s aggressive stance.
As tensions mount, the European Parliament is expected to suspend ratification of a significant EU-U.S. trade deal due to the escalating dispute. What’s next The lack of clarity and details around this agreement leaves much in limbo about the future of economic ties between U.S. and Europe.
“The shift in the international order is not only seismic, but it is permanent.” – Ursula von der Leyen
Indeed, the president has attempted to rationalize his interest in the autonomous territory by invoking “national security” as the rationale. The U.S. has a military base stationed on the island. In addition, it has a bilateral agreement with Denmark to further establish its presence there. Unsurprisingly, many European leaders have been quick to express their skepticism about Trump’s motives.
Scott Bessent, an influential figure in financial circles, commented on the broader implications of Trump’s actions, stating, “If this is all President Macron has to do when the French budget is in shambles, I would suggest he focuses on other things for the French people.” This statement is indicative of a larger realization among the other European leaders that Trump’s unilateral approach would remove focus from urgent domestic priorities.
European investors too are reconsidering their plans in the face of Trump’s threats. Denmark’s pension funds and other investors could look to divest from the U.S. market should tensions continue to develop. Such actions would be counterproductive and deeply damaging to U.S. economic interests.
Finnish President Alexander Stubb is one of the few European leaders who still believes a diplomatic solution can be found to the conflict. He thinks dialogue might be able to de-escalate the situation and return some predictability to transatlantic relations.
EU leaders have not given up on constructive trade dialogues with Washington and they are still taking place on both technical and high political levels. More than anything, they want to discover the path toward bridging the chasm that Trump’s destructive scorch and burn politics has wrought.