US-EU Tariffs to Impact Transatlantic Relations
January, 18, 2026—When U.S. President Donald Trump started talking about taking over Greenland on the 2024 campaign trail, his Republican colleagues and most of America did not take him seriously. Political allies like House Republican Speaker Mike Johnson and others dismissed it as campaign rhetoric and declined to answer questions about it even as Trump carried on with the rhetoric from the White House.
But Trump was clear as early as December 2024 when he announced his nomination of PayPal funder Ken Howery as ambassador to Denmark “that the ownership and control of Greenland is an absolute necessity.” As early as January 2025, he talked about the possibility of using the U.S. military or economic coercion to seize the territory.
Now, as the United States wages a trade war against its closest allies, it is impossible to ignore.
European leaders are learning a brutal lesson about appeasing the U.S. president. Appease is an interesting word given the world’s history of nationalistic leaders intent on taking foreign lands.
Greenland’s Status
Greenland is a semiautonomous territory of Denmark . Since 2009, its population governs itself under Denmark’s Greenland Self-Rule Act. Denmark, meanwhile, maintains control over foreign affairs, defense, and monetary policy while providing $500 million a year to the island territory. The population of about 56,000 is predominately Inuit with some mixed Danish ancestry. Geopolitically, Greenland is part of NATO but not the European Union. Geographically, it is the world’s largest island. Ice covers 80 percent of the territory. Greenland is thought to be rich in critical minerals like lithium, oil, and gas. Separately, as part of its agreements, the United States has a military base in Greenland. The Pituffol Space Base conducts space surveillance under a U.S.-Denmark agreement for strategic Arctic presence. It is run by U.S. Air Force and the New York Air National Guard.
The Arctic: Competing Interests
In the past decade, as global warming melts thick ice in the Arctic, powerful countries are increasingly making economic claims in the region. The GER wrote about this in 2018 when China outlined its goals for a trade route through the Arctic. Eight countries with territory in the Arctic Circle are: Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States. In 2008, the United States, Russia, Canada, Norway and Denmark signed a declaration to forbid any country from governing the region and laying out a means for countries to settle competing claims to the territory. The signatories border the Arctic, along with Sweden, Finland and Iceland.
US-EU Tariff War
Trump is now demanding full ownership over the 836,000 square-mile territory and is refusing to back down. Instead of working out a solution agreeable to the transatlantic alliance, he is aggravating it. On Friday, January 16, Trump vowed to impose tariffs on European countries that oppose his plan to annex Greenland. Specifically, Trump said he would:
- Impose a 10 percent tariff on Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the United Kingdom starting February 1, 2026
- Raise the tariff to 25 percent starting June 1, 2026.
“This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland,” Trump said on Truth Social, a platform he owns.
Trump added that he wants Greenland as part of a plan to build a “Golden Dome” national defense, which is similar to Israel’s Iron Dome.
Europe Retaliation
European leaders are fighting back. On Sunday, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the United Kingdom issued a joint statement in support of Denmark and Greenland, standing firmly by “the principals of sovereignty and territorial integrity.” The European Union released a similar statement and pledged support for Danish military exercises in Greenland. They warned that tariffs would “undermine transatlantic relations and risk a dangerous downward spiral.”
Separately, national leaders and European Union representatives started talking about retaliatory tariffs. Ambassadors from the 27-nation bloc held an emergency meeting in Brussels.
Financial Times correspondents Henry Foy, Richard Milne, and Laura Pitel write that European leaders are learning a brutal lesson. “Their painstaking efforts to appease the U.S. president and protect the transatlantic relationship have failed.”
Appease is an interesting word given the world’s history of nationalistic leaders intent on taking foreign lands. Especially since Trump has taken office, European leaders have taken a conciliatory approach to Trump’s transactional diplomacy for the sake of keeping the United States involved in NATO and defense of Ukraine.
Now, all that is at risk—NATO, Ukraine, and transatlantic trade.
Europe is waking up to the fact that it is not just bilateral relations that are at stake, it is also the semblance of international order. Trump recently dismissed international law, saying his “own morality” is the only thing that guides him.
An Assault on NATO
When partners in a strategic alliance wage trade wars and use of military force, it is common sense that the primary threat is to the alliance itself. It is not clear if NATO and the transatlantic alliance will survive, at least not in the current state.
Anders Fogh Rasmussen, a former head of NATO and former Danish prime minister, tried to put the emphasis back on common adversaries: China and Russia. He said Trump’s rhetoric on Greenland is “a weapon of mass distraction from the real threats.” He added the United States should be controlling “gangsters” in Russia and China, not acting like them.
Others pleaded for a reverse in psychology.
“President Trump’s decision to secure ownership of Greenland would critically undermine the world’s strongest military alliance and is fundamentally contrary to the U.S. national interest,” said Ian Bremmer, president of the Eurasia Group. “A solid majority of Americans understand this and oppose the decision accordingly. President Trump has shown he’s capable of forgetting about particularly bad decisions. Hopefully, he’ll show that capability here.”
What is clear is that if Trump continues to use tools of economic coercion and military use of force, there will be a tipping point. That could impact not only trade and military relations, but also the status of the U.S. dollar as the world’s primary reserve currency.
