US President Donald Trump withdrew his threat to impose tariffs on European countries, citing a new NATO framework on Greenland and Arctic security. The move eased market fears and drew relief across Europe amid ongoing tensions over sovereignty
Donald Trump. Pic/AFP
US President Donald Trump said Wednesday he is dropping his threat to impose tariffs on several European countries, citing what he described as a new framework with NATO on Arctic security.
The abrupt about-face comes shortly after he told the World Economic Forum in Davos that the US would not use force to pursue control of Greenland.
Asked how long the deal will last, Trump was clear it's long term. "It's a deal that's forever," he said. "It's what's called an infinite deal."
In his earlier speech, Trump reaffirmed his ambition to secure "right, title and ownership" of Greenland and urged NATO allies not to stand in the way, warning that refusals would carry consequences for the alliance.
Trump's address at the annual meeting of the elite in Switzerland tried to focus on his efforts to tame inflation and spur the economy back home. But his more than 70-minute address focused more on his gripes with other countries.
European Commission President Ursula von der Leyen on Tuesday called Trump's planned new tariffs on eight EU countries over Greenland a "mistake" and questioned Trump's trustworthiness.
French President Emmanuel Macron said the EU could retaliate by deploying one of its most powerful economic tools, known colloquially as a trade "bazooka."
US stocks recover half of prior day's plunge after Trump calls off tariffs
The US stock market rebounded after Trump called off Greenland-related tariffs that he had threatened to impose on Europe.
The S and P 500 rallied 1.2 per cent Wednesday after Trump said he reached the framework of a deal about Greenland. The index recovered about half the ground it lost a day earlier.
The Dow Jones Industrial Average also rose 1.2 per cent, as did the Nasdaq composite. Treasury yields eased in the bond market. They also got some help from a calming of government bond yields in Japan.
Europe relieved after Trump walks back tariff threat: US officials
Financial markets aren't the only ones breathing a sigh of relief after Trump rescinded his threat to impose new tariffs on European allies for their defence of Greenland and Danish sovereignty.
A number of US officials had also been concerned about Trump's hardline stance and bellicose rhetoric toward Greenland, Denmark and other NATO allies because they feared it could harm other foreign policy goals.
These officials thought the fixation on Greenland and taking it at any cost was distracting from and complicating the president's effort to form the Board of Peace, which is supposed to be announced on Thursday in Davos, to oversee the Gaza ceasefire operation.
Many European countries, which were already skeptical of the proposed board's broad global mandate, had reacted even more negatively to the concept after Trump's tariff threat.
The US officials spoke on condition of anonymity to discuss concerns being floated inside the administration.
Trump says Greenland framework would meet his national security concerns.
"The deal is going to be put out pretty soon," Trump said in a brief exchange with reporters on the sidelines of Davos forum. "It gets us everything we needed to get."
Trump says deal will last forever
As he departed the World Economic Forum for the day, Trump said his newly agreed-upon framework of a deal with NATO's chief is "a great deal for everybody."
He told reporters everyone would be happy with the deal, which relates to Greenland and the Arctic. While he said people are still working out the details, he emphasized it would be "really fantastic for the USA."
Asked how long the deal will last, Trump was clear it's long term.
"It's a deal that's forever," he said. "It's what's called an infinite deal." Trump declines to name a price for Greenland
Trump declined to name a reasonable price for the United States to buy Greenland during a meeting with the NATO secretary general.
"There's a bigger price, and that's the price of safety and security and national security and international security having to do with many of your countries," Trump responded when asked by The Associated Press how he would calculate a reasonable offer for the strategic land mass. "That's really the price. It's a big price."
Trump responded ambiguously when asked to elaborate on his earlier comment that "we will remember" if Denmark refuses to sell Greenland to the US
"You'll have to figure that out for yourself," he told a reporter. Sweden's deputy PM calls for Europe to toughen up' against Trump
Ebba Busch, the deputy prime minister of Sweden, said she heard "a mix of irrational and rational arguments at the same time" from Trump.
"Europe needs to toughen up. We need to hold the line," she told reporters in Davos.
"We will not be bullied or blackmailed into letting go of territory that is, in this case, Greenland's and Denmark's."
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