Why Greenland has become a trade flashpoint for Donald Trump

Illustration: TBS

US President Donald Trump's new push to acquire Greenland has turned a long-ridiculed idea into a serious geopolitical and economic confrontation. 

By threatening escalating tariffs on European allies unless the US is allowed to buy the autonomous Danish territory, Trump has fused trade policy with territorial ambition, unsettling NATO partners and reopening debates about presidential power in Washington.

Recently, Trump announced that the US would impose additional import tariffs on eight European countries: Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and UK, from 1 February.

The new levies would begin at 10% and rise to 25% from 1 June, remaining in place until the US secures ownership of Greenland. The declaration, posted on Truth Social, left little doubt that the tariffs were intended as direct political pressure rather than economic policy.

Denmark and Greenland rejected the demand. Greenland's leaders reiterated that the territory is not for sale and that its future will be decided by its own people.

The pushback reflects not only political principle but also public sentiment. A Reuters/Ipsos poll this week found that less than one in five Americans support acquiring Greenland, undercutting Trump's claim that the move reflects national consensus.

Trump has justified his stance by pointing to security and resources. He argues that Greenland's strategic Arctic position and its mineral reserves make it vital to US interests, particularly as China and Russia expand their presence in the region. He has also refused to rule out the use of force, a remark that triggered alarm across Europe and within NATO.

Trump's warning could derail tentative trade arrangements reached last year between the US, the EU and the UK, which included baseline tariffs of 15% on European imports and 10% on most British goods.

That concern deepened when European nations sent military personnel to Greenland at Denmark's request. Trump criticised the move as reckless, accusing European allies of playing a "dangerous game" that risked regional stability. On the ground, however, protests in Denmark and Greenland reflected local opposition to any US attempt to dictate the island's future.

European leaders responded with unity. 

Denmark's Foreign Minister Lars Løkke Rasmussen, said Trump's announcement was unexpected. 

British Prime Minister Keir Starmer offered a rebuke. "Applying tariffs on allies for pursuing the collective security of NATO allies is completely wrong," he wrote on X, confirming that London would raise the issue directly with Washington.

At the EU, European Commission President Ursula von der Leyen and European Council President Antonio Costa issued coordinated statements declaring "full solidarity" with Denmark and Greenland.

They warned that tariffs would damage transatlantic relations and risk a downward spiral of retaliation, insisting that Europe would remain united in defending its sovereignty. Norway, Sweden, France, and Germany echoed that position, rejecting the idea that trade measures should be used in territorial disputes.

Cyprus, which currently holds the EU presidency, has called an emergency meeting of ambassadors from all 27 member states, signalling that Brussels views Trump's threat as a collective challenge rather than a bilateral disagreement.

Trump's warning could derail tentative trade arrangements reached last year between the US, the EU and the UK, which included baseline tariffs of 15% on European imports and 10% on most British goods.

William Reinsch of the Center for Strategic and International Studies warned in an interview with Reuters that such an approach may convince the European Parliament that approving a trade deal with Washington is pointless if the US president can override agreements at will.

Trump has offered no clear legal basis for the tariffs, consistent with his broader habit of using trade penalties as a foreign policy weapon. Earlier, he threatened 25% tariffs on countries trading with Iran over its crackdown on protests, again without official documentation.

These moves have heightened scrutiny of presidential authority, especially as the US Supreme Court considers the legality of Trump's sweeping tariff powers. Its ruling could have far-reaching consequences for global trade and executive power.

European officials remain sceptical of Trump's security argument. Greenland already falls under NATO's collective defence umbrella, and the US operates the Pituffik Space Base on the island with around 200 personnel. A 1951 agreement allows Washington to deploy additional forces there if needed, undermining claims that ownership is essential for defence.

For many in Europe, the conclusion is that Trump's interest is driven more by territorial ambition than security necessity. EU foreign policy chief Kaja Kallas warned in an interview with CNN that divisions among allies only benefit rivals, noting that China and Russia stand to gain from transatlantic discord.

Resistance is also emerging within the US. 

Senators Jeanne Shaheen and Thom Tillis, bipartisan leaders of the Senate NATO Observer Group, warned that Trump's approach is bad for American businesses, US credibility and alliances.

Some analysts urge caution rather than confrontation. Carsten Brzeski, global head of macro at ING Research, suggested Europe should avoid overreaction, arguing that tariffs, while destabilising, are less dangerous than earlier talk of military action.