It is exactly one year since Donald Trump’s second presidential inauguration and European leaders have tried to manage him with patience, flattery and quiet diplomacy. Over Greenland, that approach has finally snapped.
Trump’s threat to impose punitive tariffs on close allies unless they acquiesce to his demand to acquire the Danish-controlled Arctic island has triggered the most forceful European pushback since his return to the White House. The language has hardened, the warnings have sharpened, and the unthinkable – retaliation against the United States – is now openly discussed in European capitals, including London.
What was once dismissed as bombast is now treated as coercion, with Denmark’s Prime Minister, Mette Frederiksen, describing the threats as “blackmail”.
Officials say Trump has crossed a line by linking trade punishment to a demand that strikes at sovereignty and international law. “Appeasement has not worked,” one senior EU diplomat said. “This is about trust. And we can no longer trust that the US under Trump is still our friend and ally.”
That shift in tone matters. Until now, Europe’s overriding instinct has been to avoid confrontation with Washington for fear of jeopardising Nato unity or US support for Ukraine. But Trump’s Greenland gambit – backed by threats of tariffs rising to 25 per cent by the summer – has forced a recalibration. France, Germany and several Nordic states have warned that Europe must be ready to respond forcefully if the tariffs materialise.
The most immediate tool at the EU’s disposal is €93bn worth of retaliatory tariffs on American exports – measures prepared last year and then frozen as part of a fragile trade truce between Trump and the European Commission last July.
European Commission president, Ursula von der Leyen, in Davos on Tuesday, where she warned that the EU’s response would be ‘unflinching, united and proportional’ (Photo: Fabrice Coffrini/AFP)MEPs were set to approve that deal this week, but that will not happen now. The ready-made tariffs list targets major US exports including Boeing aeroplanes, soybeans, Levi’s jeans, Harley Davidson motorcycles, Kentucky bourbon, tobacco and orange juice.
The calculation is simple. Europe’s audience is not just Trump. They increasingly believe that the real battle is to influence political and business opinion inside the US. European embassies are reaching out to members of Congress, governors, industry groups and investors, warning that a trade clash with America’s largest economic partner would carry real domestic costs. The dollar continued to fall sharply on Tuesday along with key US stocks, on the back of the Greenland threats.
There are also pointed warnings that the EU’s trade sanctions are calibrated to hurt US swing states, a potential factor ahead of this year’s mid-term elections. In Davos on Monday night, European Commission president, Ursula von der Leyen, met a bipartisan delegation from the US Congress. The planned tariff on soybeans would have a big impact on Louisiana, represented by senior Republican Mike Johnson, the House Speaker.
While Trump may relish brinkmanship, US exporters, manufacturers and financial markets are far less enthusiastic about a tariff war with Europe. By highlighting those risks, Europeans hope to generate internal pressure on the White House to step back.
Beyond tariffs is the EU’s most potent weapon, the so-called Anti-Coercion Instrument (ACI), a law designed to counter economic blackmail, nicknamed the “trade bazooka”. While many capitals remain wary of escalation, the fact that such options are being discussed at all marks a profound change.
French President Emmanuel Macron told the World Economic Forum that Europe had ‘very strong tools’ which it should not hesitate to deploy ‘when we are not respected’ (Photo: Harun Ozalp /Anadolu via Getty Images)The ACI is a nuclear option, untested, and would take time to wield: the Commission could take up to four months just figuring out if coercion is taking place, and another two months for member states to agree the targets.
“Even just triggering the instrument would signal that the EU is united in responding to a threat to the territorial integrity of one of its members,” says Ignacio García Bercero, a senior fellow at Bruegel, a Brussels-based think tank. “Conversely, failure to invoke the ACI would indicate that the EU will never be able to provide a united response to coercion, or that it will apply double standards depending on the identity of the coercer.”
The EU must show it can hit back hard, and as one, according to Varg Folkman, a policy analyst at the European Policy Centre (EPC). “Like a schoolyard bully, Trump senses weakness. Now is the time to show Trump he has overplayed his hand. If the EU cannot stand up to threats to its member states’ territorial integrity – even through commercial instruments – then claims that the EU is done as a geopolitical actor will ring true.”
Officials are also mulling a potential third measure, a digital tax on US tech companies – something that Trump and many of his billionaire supporters have railed against.
The UK, too, is part of this picture. Britain is among the eight countries targeted by Trump’s tariff threat and was a signatory to a joint warning that such measures risk a “dangerous downward spiral” in transatlantic relations. If Trump carries out his tariff threat, Prime Minister Keir Starmer’s own trade deal with Trump, agreed last May, would be scuppered.
The USA house ahead of the Annual Meeting of the World Economy Forum in Davos, Switzerland (Photo: Markus Schreiber/ AP)Starmer has so far resisted talk of immediate retaliation. But Downing Street has also been unusually blunt in criticising the use of tariffs against allies for pursuing collective Nato security – a clear signal that London does not see Greenland as a bilateral Danish issue, but a wider test of alliance solidarity. EU officials have confirmed there is close co-ordination between London and Brussels on this: if Brussels goes ahead with retaliatory tariffs, Britain could follow suit.
The next few days will prove decisive. European leaders have descended on Davos, where Trump’s presence has turned the annual gathering into a high-stakes diplomatic arena. Informal meetings with US officials are seen as a last chance to de-escalate before Europe is forced to act. Then, on Thursday, EU leaders will meet in Brussels for an emergency summit focused squarely on the Greenland crisis and its wider implications.
“We can no longer pretend that we can wait this storm out,” an EU official said. “We are in a world of hard power. We have to learn to use ours, and we have to learn fast.”
Behind the scenes, co-ordination has been intense, with heated debates on whether retaliatory tariffs would damage both economies and undermine shared security. Germany’s Friedrich Merz and Italy’s Giorgia Meloni, are still hoping to deter Trump without triggering an uncontrollable escalation. But even they have been vocal in denouncing Trump’s Greenland threats and urging a common European response.
French President Emmanuel Macron has emerged as the most outspoken advocate of a tougher line, including the use of the ACI bazooka, telling Davos: “We do prefer respect to bullies,” and adding that the EU must “not hesitate to deploy” the ACI. “Europe has very strong tools now, and we have to use them when we are not respected,” he said.
On the US side, California’s Democrat Governor, Gavin Newsom, an outspoken Trump critic who is also in Davos, urged Europe to “have a backbone”.
Von der Leyen, while attempting to co-ordinate the EU response, has pushed for Europe to think of the bigger picture of strategic autonomy, saying its seismic challenge went beyond Greenland. “Geopolitical shocks can – and must – serve as an opportunity for Europe,” she said. “That Europe must speed up its push for independence – from security to economy, from defence to democracy.”
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She warned that Europe response would be “unflinching, united and proportional”.
Whether threatening a tariff war with the US works remains uncertain. For now, Europe is responding louder than ever – in Davos, in Brussels, in London and in Washington. But the old assumption that transatlantic tensions can always be smoothed over is fading fast. Greenland has become the symbol of something much larger: a moment when Europe is deciding whether to keep absorbing shocks or finally push back.
In her Davos speech, von der Leyen was already looking ahead to a Europe without America. “It is time to seize this opportunity and build a new independent Europe,” she said. “The world has changed permanently. We need to change with it.”
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