European Commission President Ursula von der Leyen has issued a stark warning to the United States, criticising President Donald Trump's threat to impose punitive tariffs on European allies in an escalating row over Greenland. Speaking at the World Economic Forum in Davos, she said the move risked a damaging trade spiral that would only benefit foreign adversaries.
A Firm Response from Brussels
Von der Leyen was responding directly to Trump's announcement that, starting in February, a 10 per cent import tax would be levied on goods from eight European nations. These countries have rallied around Denmark following Trump's intensified campaign for the United States to take control of the semi-autonomous Danish territory. She framed the proposed tariffs as a profound error between long-standing allies.
"Arctic security can only be achieved together," von der Leyen stated at the Congress Hall. "Plunging us into a downward spiral would only aid the very adversaries we are both so committed to keeping out of the strategic landscape. Our response will be unflinching, united and proportional."
She emphasised that the sovereignty of Denmark and Greenland was non-negotiable and revealed that work is advancing on an EU package to support Arctic security. This includes plans for a "massive European investment surge in Greenland" to bolster local infrastructure and the economy.
Provocation and Retaliation
The diplomatic crisis has been exacerbated by Trump's use of social media to troll European leaders. On his Truth Social platform, he posted an AI-generated image showing von der Leyen, UK Prime Minister Sir Keir Starmer, France's President Emmanuel Macron, and Italy's Prime Minister Giorgia Meloni gathered in the Oval Office looking at a map where Greenland and Canada were covered by the US flag.
This followed a genuine photograph from August 2025, originally showing leaders near a whiteboard depicting the Ukraine conflict front line. In another provocative post, Trump shared an illustration of himself planting an American flag in Greenland, flanked by Secretary of State Marco Rubio and Vice-President JD Vance.
In response, European allies are now seriously considering deploying their formidable trade 'bazooka' for the first time. This instrument, officially the EU's Anti-Coercion Instrument, could sanction US individuals or institutions and hit America with retaliatory tariffs worth an estimated £81 billion.
Markets React and Allies Weigh In
The rising tensions have already rattled financial markets. On Tuesday, benchmarks in Germany, France, and Britain fell by around 1 per cent, while futures for the S&P 500 and Dow Jones dropped by 1.5 per cent and 1.4 per cent respectively.
While US Treasury Secretary Scott Bessent urged trading partners to "take a deep breath," other voices were less conciliatory. California Governor Gavin Newsom, speaking in Davos, labelled Europe's initial response to Trump's threats as "pathetic" and "embarrassing," urging leaders to "stand tall and firm."
The dispute has also entangled other diplomatic matters. Trump attacked the UK government's decision to hand sovereignty of the Chagos Islands to Mauritius, calling it an act of stupidity that underscored his rationale for needing Greenland. The UK had signed a deal in May to transfer sovereignty, with a 99-year leaseback for the Diego Garcia US base.
As thousands of Greenlanders marched in protest over the weekend, Greenland Prime Minister Jens-Frederik Nielsen remained defiant, stating on Facebook: "We will not be pressured." With Trump due to arrive in Davos to meet European counterparts, von der Leyen vowed to build "a new form of European independence" from the geopolitical row, setting the stage for a critical showdown.
