In January 2026, tensions between the European Union (EU) and the United States (US) intensified due to the strategic relevance of the Arctic region and renewed American interest in acquiring Greenland. The US administration publicly restated its desire to negotiate control of the territory for national security purposes.
President Donald Trump initially threatened to impose new customs duties of 10% on imports from several European countries beginning 1 February 2026, with a planned increase to 25% in June. These threats targeted Denmark, Germany, France, Sweden, the Netherlands, Finland, the United Kingdom and Norway. The tariffs were intended to pressure European governments into supporting negotiations over Greenland.
During the World Economic Forum in Davos, Trump stated that he would not use military force to acquire Greenland and later announced that he would suspend the planned tariffs. The decision followed a meeting with NATO Secretary General Mark Rutte, after which Trump said a framework for a future agreement on Greenland and the wider Arctic region had been established.
On his Truth Social platform, Trump confirmed that the tariffs scheduled for 1 February would not be implemented because of this understanding with NATO representatives.
Before Trump withdrew his tariff threats, the European Parliament had already frozen approval of the EU–US trade agreement concluded in July 2025. Lawmakers said the suspension was necessary due to US attempts to use tariff pressure in connection with the territorial integrity of Denmark and Greenland. This decision halted the implementation of tariff reductions and cooperation mechanisms that formed part of the 2025 agreement.
European legislators signalled that the agreement cannot progress until Washington returns to a cooperative approach. The freeze remains in effect, and delays continue to affect the EU legislative process related to trade commitments.
The EU is reviewing multiple policy tools that could be activated if tensions escalate again. One is the Anti Coercion Instrument (ACI) introduced in 2023. The ACI framework allows the EU to impose additional customs duties, restrict trade in goods and services or limit foreign investment and access to EU procurement markets in cases of economic coercion.
The EU has also considered reactivating a countermeasure package valued at approximately EUR 93 billion that would target US imports if the situation deteriorates further.
If tariff actions were revived at any point, they could significantly influence transatlantic trade. Possible effects include:
- Higher import and export costs for affected industries
- Shifts in sourcing strategies as businesses reduce exposure to potential duties
- Adjustments to production structures and supply chains to protect operational continuity
Market reactions in January already highlighted this sensitivity. US and European equity indices experienced declines when tariff threats were first issued, and the threat of renewed conflict contributed to volatility in currency markets.
With tariff measures suspended but not formally withdrawn, uncertainty remains. The future depends on whether the proposed framework for a Greenland agreement materializes and whether political conditions stabilize enough to resume the 2025 trade deal approval process. The situation underscores how territorial, and security concerns can directly influence trade policy, complicating the stability of the rules based international trading system.
