President Donald Trump’s economic threats on the European Union over acquiring Greenland amount to a “mistake” that violates a trade arrangement forged last year between the transatlantic allies, the bloc’s executive said.
“The European Union and the United States have agreed to a trade deal last July,” European Commission President Ursula von der Leyen said in a speech to the World Economic Forum in Davos, Switzerland, on Tuesday. “In politics as in business, a deal is a deal. And when friends shake hands, it must mean something.”
Trump announced a 10% tariff on goods from eight European countries beginning Feb. 1, rising to 25% in June, unless he has a deal for the “purchase of Greenland,” a semi-autonomous territory of Denmark, a NATO-ally and EU member. The escalation prompted European leaders to decry that the US leader has crossed a red line.
The bloc’s response will be “unflinching, united and proportional,” von der Leyen said, without offering details about what form a response would take.
EU leaders will hold an emergency meeting in Brussels Thursday to explore potential retaliatory measures. European Council President Antonio Costa said the 27-member bloc was united in support of Denmark and Greenland — and ready “to defend ourselves against any form of coercion.”
Anti-Davos protest were held in Zurich ahead of the forum. © Reuters
During a meeting Sunday, EU envoys agreed to seek a diplomatic resolution with the Trump administration while the bloc sets up options to retaliate if the US presses ahead with fresh duties, viewed as a breach of the fragile trade agreement between the US and EU last summer.
Lambasted by critics as offering excessive concessions to the US, the agreement set a 15% US tariff for most EU goods in exchange for a pledge by the EU to eliminate duties on US industrial goods and some agricultural products.
Von der Leyen, who oversees trade negotiations for the EU, forged the deal in the hopes of avoiding a full-blown trade war with Trump. The agreement now faces an uncertain future after leaders in the European Parliament said they would put the legislation on hold after Trump’s latest volley.
The measures now being considered include reactivating duties on €93 billion ($109 billion) worth of US goods, including Boeing Co. planes, cars and bourbon. The tariffs were suspended last summer before the trade deal was fleshed out at the end of July.
The EU is also considering enforcing its yet-unused anti-coercion instrument, the EU’s most powerful trade tool, which allows the commission to respond to coercive actions from third countries exploiting trade measures to pressure the bloc.
Visitors attend the World Economic Forum (WEF) annual meeting in Davos on January 20, 2026. © Photo credit: AFP
Measures could include tariffs, fees or targeted curbs on investments in the EU. They could also involve limiting access to certain parts of the EU’s vast market or restricting firms from bidding for public contracts in bloc.
In order to support Greenland, von der Leyen said that authorities are working on a support package including a “massive European investment surge.” She said the EU will also work with the US and other partners on Arctic security more broadly, which will be also reflected in the new EU security strategy.
“I believe we should use our defense spending surge on a European icebreaker capability and other equipment vital to Arctic security,” she told attendants in Davos.
Trump also sparked fears among European allies over his attempts to set up a Board of Peace initially set up for Gaza, but now viewed as an attempt to circumvent the United Nations — with an entry fee of $1 billion. EU leaders including French President Emmanuel Macron have declined to attend the launch ceremony.
In response to the French president’s snub, Trump said he would impose a “200% tariff on his wines and champagnes and he’ll join.”
