(Bloomberg) — President Donald Trump’s focus on Greenland offers an ice-cold reminder to leaders in Europe and abroad: No deal is ever final.
Trump announced a 10% tariff, increased to 25% in June, on eight European countries, including Denmark, for holding symbolic NATO military exercises in Greenland in response to US sabre-rattling.
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While it is not certain that the tariffs will take effect, the threat was a brazen escalation and an insult to close US allies, trampling on the US-EU trade deal struck just six months ago at Trump’s Turnberry resort in Scotland.
Trump’s goals in Europe were quickly pushed back. British Prime Minister Keir Starmer called his tariff threat “completely wrong”, France’s Emmanuel Macron called it “unacceptable” and Swedish Prime Minister Ulf Kristersson said his country would not be “blackmailed”.
A senior European lawmaker has called for an end to the US-EU trade truce struck with Trump in July, and ambassadors from EU member states will meet on Sunday to discuss the bloc’s next steps, according to a person familiar with the matter.
The demand for tariffs also underscored some new lessons from the second Trump administration: Nothing is beyond negotiation, alliances are met with suspicion, and power and influence are king.
“Those who thought year two was going to be a year of tariff stability should realize that it looks a lot like year one,” said Josh Lipsky, chair of international economics at the Atlantic Council. “There will be a united backlash. Firstly because of how united Europe is on Greenland and secondly because of the political price Europe has already paid for the Turnberry deal.”
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Trump’s tariffs will apply to Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland. This came as protests took place across Denmark, strongly opposed to any American control of Greenland.
Notably, Trump made the announcement about the tariffs after the countries — some of the US’s longest-standing allies and all NATO members — said they were sending just a few dozen troops to Greenland to take part in joint exercises.
“We’re not talking about Iran, we’re talking about Denmark,” said Scott Lincicome, a trade analyst at the libertarian Cato Institute, adding that the move would anger “a lot of people.”
Republican Sen. Thom Tillis and Democrat Jeanne Shaheen issued a joint statement urging the Trump administration to “turn off threats and turn on diplomacy.”
The co-chairs of the Senate NATO group wrote: “Continuing on this path is bad for America, bad for American businesses and bad for America’s allies.”
It’s unclear whether Trump would ever seriously consider invading Greenland, though he keeps leaving the possibility open. And one of its top officials accused Europe of liberating the US on Fox News Friday night, saying Greenland’s fate should reflect who has the power to protect it — even though, as part of Denmark, any attack on it by an adversary could trigger the alliance’s mutual defense clause, known as Article 5, and a potential US response.
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“Denmark is a small country with a small economy and a small military. They can’t defend Greenland,” Deputy Chief of Staff Stephen Miller told the network. “To control a territory, you have to be able to defend the territory, improve the territory, inhabit the territory. Denmark failed each of these tests.”
Because it is part of Denmark, it is also “in principle covered by the mutual solidarity clause in Article 42.7 of the Treaty on European Union,” European Commission spokeswoman Anita Hipper said this week.
Instead, NATO member states now face economic pressure from a member of their bloc to support the forcible seizure, an extraordinary development even by the standards of Trump’s apparent transactionalism.
Change calculations
Until now, European leaders have tried to appease Trump by cutting deals and not confronting him, particularly as they sought to maintain U.S. military and intelligence support for Ukraine to fend off Russian aggression.
But a move in Greenland could change the EU’s calculations.
The allies had previously concluded that “it’s better to appease Trump and move on than to escalate, and if you do that, you can give your companies and investors some certainty,” Lincicome said. “Clearly, it’s wrong. The only government that seems to have gotten Trump to back down so far is China, and that’s through fairly aggressive retaliation.”
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Tariffs related to Greenland may not go into effect — Trump may try to impose them under a law that could soon be decided by the Supreme Court, potentially limiting the authority Trump has so far used to quickly enact tariffs on friends and foes alike.
Both Lipsky and Lincicome said they thought it unlikely, given the Supreme Court case and other factors, that the tariffs would actually begin on Feb. 1.
“Not impossible, but a slim chance,” Lipsky said. But it’s also unclear what Europe could negotiate to get a delay, as it has in other tariff negotiations. “It’s different from the traditional threat.
Trump’s threat drew criticism from outgoing Republican Rep. Don Bacon, who said Congress should take back the customs powers Trump has consolidated and predicted Trump’s impeachment if he invaded.
“I feel like it’s up to people like me to speak up and say that these threats and bullying of allies is wrong,” Bacon told CNN. “And just on the odd chance that he’s serious about invading Greenland, I want to let him know that it would probably be the end of his presidency. Most Republicans know it’s a moral wrong and we would oppose it.”
Ron Wyden, the top Democrat on the Senate Finance Committee, called Trump’s latest threat an “unnecessary imperial fantasy” and urged other lawmakers to distance themselves from it. Senate Minority Leader Chuck Schumer said Democrats would introduce legislation aimed at preventing Trump from imposing the levies.
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