U.S. President Donald Trump has withdrawn the "military and tariff pressure" card he had pulled out to annex Greenland.
In a speech at the World Economic Forum held in Davos, Switzerland, on the 21st (local time), Trump canceled the tariff plan he had signaled for eight European countries and said he would "not use excessive force and coercion," formally ruling out the use of force. It is interpreted not as a simple change in principle but as a tactical retreat chosen to simultaneously prevent an alliance collapse, financial market turmoil and a split within NATO.
Experts said the immediate trigger for this policy shift was the collective counterattack shown by Europe. Ahead of Trump's speech, French President Emmanuel Macron warned on the ground in Davos that "Europe possesses very powerful tools and must use them if it is not respected." Belgian Prime Minister Bart De Wever directly criticized excessive dependence on the United States, saying, "Being a happy vassal is different from being a miserable slave."
It was not just lip service. The European Parliament responded to President Trump's tariff threats by taking concrete action to suspend the approval process for an already concluded U.S.-Europe trade agreement. If Trump had imposed a 10% tariff starting on the 1st of next month as scheduled and raised it to 25% by June, a full-blown trade war across the Atlantic would have been inevitable. The Washington Post, citing experts, said that in this case the United States, too, could not have avoided the wounds of reignited inflation and a contraction of export markets.
The immediate reaction shown by U.S. financial markets also made the Trump administration's calculations more complicated. The political outlet Politico reported that since the threat to annex Greenland intensified, the New York stock market showed its first clear decline of the new year. During his Davos speech, Trump repeatedly misnamed Greenland as Iceland, yet said, "Because of this island, the stock market fell yesterday, and it has already made us spend a lot of money." Politico said this showed the Trump administration did not hide that it was closely watching the market reaction. In fact, immediately after the declaration ruling out the use of force that day, Wall Street bounced back, staging a "relief rally."
The North Atlantic Treaty Organization (NATO), which had been close to a scarecrow, served as a decisive mediator in this phase. NATO Secretary-General Mark Rutte coordinated conflicts between European leaders and Trump. Immediately after his speech, Trump said he had a "very productive meeting" with Rutte and announced that they had "established a framework for an agreement" on the Greenland issue. The Washington Post assessed that after the meeting with Secretary-General Rutte, President Trump shifted the focus of negotiations from the overreach of military occupation or forced annexation to securing practical interests such as expanding U.S. military bases and acquiring resource development rights.
The retreat shown by President Trump is also intertwined with domestic political factors. The BBC reported that even within the Republican Party there is growing concern about military adventurism over Greenland. As relations between Europe and the United States worsen, some Republican lawmakers warned that Trump's unilateral actions could lead to international isolation and a split within NATO. The possibility of a brake at the congressional level was also mentioned. In addition, Denmark conducting joint military exercises in Greenland with the United Kingdom and France, among others, also acted as pressure. This directly refuted Trump's "undefended island" framing while signaling that Europe could take real action.
Experts assessed this policy reversal as a typical case of Trump-style negotiation. The method of cornering the other side with extreme threats and then stepping back a bit to secure practical gains is one Trump has shown repeatedly in tariff negotiations with China, Mexico and others. After meeting with Secretary-General Rutte that day, Trump said, "The framework of a future agreement contains everything the United States wants." Politico reported that this means the strategy has shifted from the symbol of territorial ownership to securing economic and military practical interests.
However, the conflict has not been fundamentally resolved. At the end of his speech, Trump warned Europe that "the choice is theirs" and said, "If they say no, we will definitely remember." Experts said the current temporary calm is closer to a truce. If negotiations break down, the tariff or pressure card could still reappear. It means whether the tactical retreat chosen by President Trump will lead to a diplomatic solution depends on follow-up talks.