A deal is a deal: Europe questions US trust as tariff row escalates

The European Union’s top official on Tuesday described US President Donald Trump’s planned new tariffs over Greenland as “a mistake especially between long-standing allies” and called into question Trump’s trustworthiness, saying that he had agreed last year not to impose more tariffs on members of the bloc.

European Commission President Ursula von der Leyen was responding to Trump’s announcement that starting February, a 10 per cent import tax will be imposed on goods from eight European nations that have rallied around Denmark in the wake of his stepped up calls for the United States to take over the semi-autonomous Danish territory of Greenland.

“The European Union and the United States have agreed to a trade deal last July,” Von der Leyen said at the World Economic Forum in Davos, Switzerland. “And in politics as in business — a deal is a deal. And when friends shake hands, it must mean something.”“We consider the people of the United States not just our allies, but our friends. And plunging us into a downward spiral would only aid the very adversaries we are both so committed to keeping out of the strategic landscape,” she added. She vowed that the EU’s response “will be unflinching, united and proportional.”

Trump has insisted the US needs the territory for security reasons against possible threats from China and Russia.Earlier Tuesday, US Treasury Secretary Scott Bessent said America’s relations with Europe remain strong and urged trading partners to “take a deep breath” and let tensions driven the new tariff threats over Greenland “play out.”“I think our relations have never been closer,” he said.

The American leader’s threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.

The EU has three major economic tools it could use to pressure Washington: new tariffs, suspension of the US-EU trade deal, and the “trade bazooka” — the unofficial term for the bloc’s Anti-Coercion Instrument, which could sanction individuals or institutions found to be putting undue pressure on the EU.Earlier Tuesday, Trump posted on social media that he had spoken with NATO Secretary General Mark Rutte. He said “I agreed to a meeting of the various parties in Davos, Switzerland,” which is hosting the World Economic Forum’s annual meeting this week.

Trump also posted a text message from Emmanuel Macron in which the French president suggested a meeting of members of the Group of Seven industrialised democracies in Paris after the Davos gathering.An official close to French President Macron confirmed the message shared by Trump is genuine. “It shows that the French President, both in public and in private, takes the same views,” the official said.

On Greenland, France considers respect for the sovereignty and territorial integrity of states is “non-negotiable,” the official said. Macron’s offer to organise a G7 meeting showed the French presidency wants to make “a constructive moment that contributes to dialogue and cooperation,” the official added.The official spoke anonymously in line with the French presidency customary practices.

Later, Trump posted some provocatively doctored images. One showed him planting the US flag next to a sign reading “Greenland, US Territory, Est 2026.” The other showed Trump in the Oval Office next to a map that showed Greenland and Canada covered with the US Stars and Stripes.

In a sign of how tensions have increased in recent days, thousands of Greenlanders marched over the weekend in protest of any effort to take over their island. Greenland Prime Minister Jens-Frederik Nielsen said in a Facebook post Monday that the tariff threats would not change their stance.

“We will not be pressured,” he wrote.In his latest threat of tariffs, Trump indicated that the import taxes would be retaliation for last week’s deployment of symbolic numbers of troops from the European countries to Greenland - though he also suggested that he was using the tariffs as leverage to negotiate with Denmark.

Denmark’s minister for European affairs called Trump’s tariff threats “deeply unfair.” He said that Europe needs to become even stronger and more independent, while stressing “there is no interest in escalating a trade war.”“You just have to note that we are on the edge of a new world order, where having power has unfortunately become crucial, and we see a United States with an enormous condescending rhetoric towards Europe,” Marie Bjerre told Danish public broadcaster DK on Tuesday.

Speaking on the sidelines of Davos, California Gov Gavin Newsom slammed Europe’s response to Trump’s tariff threats as “pathetic” and “embarrassing,” and urged European leaders to unite and stand up to the United States.

“It is time to get serious, and stop being complicit,” Newsom told reporters. “It’s time to stand tall and firm, have a backbone.”On Monday night, Greenland’s European backers were looking at establishing a more permanent military presence in the High North to help guarantee security in the Arctic region, a key demand of the United States, Swedish Defence Minister Pal Jonson said.

Jonson said that European members of NATO are currently “doing what’s called a reconnaissance tour in order to identify what kind of needs there are when it comes to infrastructure and exercises and so forth.”“What we take note of is that the United States has indeed pointed out that more attention needs to be brought into the High North and to the Arctic,” Jonson told reporters at NATO headquarters in Brussels, after talks with his counterparts from Denmark, Greenland and Norway.

Asked whether it might lead to a more permanent military presence, Jonson said they “think this could be a way forward.”European markets opened sharply lower on Tuesday and US futures fell further as tensions rose over Greenland. Benchmarks in Germany, France and Britain fell about 1 per cent. The future for the S&P 500 lost 1.5 per cent and the Dow future was down 1.4 per cent.

With US trading closed Monday for a holiday, financial markets had a relatively muted response to Trump’s threat to put a 10 per cent extra tariff on exports from eight European countries that have opposed his push to exert control over Greenland.Jonas Golterman of Capital Economics described the situation as a lose-lose one for both the US and the targets of Trump’s anger. He said, “It certainly feels like the kind of situation that could get worse before it gets better.”

In another sign of tension between allies, the British government on Tuesday defended its decision to hand sovereignty of the Chagos Islands to Mauritius after Trump attacked the plan, which his administration previously supported.Trump said that relinquishing the remote Indian Ocean archipelago, home to a strategically important American naval and bomber base, was an act of stupidity that shows why he needs to take over Greenland.The United Kingdom signed a deal in May to give Mauritius sovereignty over the islands, though the UK will lease back the island of Diego Garcia, where the US base is located, for at least 99 years.In a speech to lawmakers at Britain’s Parliament on Tuesday, US House of Representatives Speaker Mike Johnson said he hoped to “calm the waters” as Trump roils the trans-Atlantic relationship with his desire to take over Greenland.In a speech to lawmakers at Britain’s Parliament, Johnson said the US and the UK “have always been able to work through our differences calmly, as friends.(AP)