DAVOS, SWITZERLAND – JANUARY 21: Delegates watch as U.S. President Donald Trump speaks on stage at the World Economic Forum (WEF) on January 21, 2026 in Davos, Switzerland.
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Markets and some European leaders welcomed the news that US President Donald Trump The country backed away from imposing new tariffs on European countries – but others remained perplexed.
Trump told CNBC on Wednesday that he had “the idea of a deal” with NATO Secretary General Mark Rutte, shortly after saying on Truth Social that he would not carry out the levies he had threatened on eight European countries starting February 1.
Markets rose on Thursday on the news, but questions remain about the so-called Greenland deal.
As the president did not share details of the framework — or who agreed to it — one strategist told CNBC, “No one will believe it anymore.”
A “deal” without an agreementTrump presented the agreement with Greenland in general terms, he presents it as an “ultimate long-term agreement” that guarantees the national security of the United States and provides access to “minerals”.
Greenland’s geographic location is important to the Arctic’s military posture, but climate change is making the island more accessible, sparking renewed interest in its rare earths and other critical mineral reserves.
But Trump did not say whether Denmark, responsible for the island’s defense, or Greenland had signed anything.
Rutte told Fox News that question of ownership of Greenland was not discussed during his meetings with Trump, which were on Arctic security as Chinese and Russian activity increases.
Ed Price, a nonresident senior fellow at New York University, told CNBC on Thursday that to make a deal “you need two people to know how to tango,” describing Trump’s speech at the World Economic Forum in Davos, Switzerland, as “a monologue, not a dialogue.”
Price also said the framework was “the beginning of a process, not the end,” warning that a precedent of negotiating over disputed territories could tempt future attempts elsewhere.
Chinese state media, meanwhile, urged the European Union on Wednesday to reassess its security dependence on the United States and seek greater “strategic autonomy.”
Trump has “favored” China over the long term by signaling that U.S. commitments can vary widely depending on political incentives, Price added.
Why Trump blinked: Treasury yieldsRobin Brooks, a senior fellow at the Brookings Institution, said Trump’s toned-down rhetoric had “nothing to do with Europe” and was more likely driven by concerns about recent exchange rate hikes. global bond yieldswhich pounced on fears of a new trade war.
Brooks also said the Europeans had limited influence in negotiations with Trump.
“The Europeans have, obviously, taken advantage of the American security umbrella. They need to spend more. They will,” Brooks said, warning that most countries except Germany are running out of fiscal space. “A lot of these countries don’t have any fiscal firepower,” he told CNBC.Squawk Asia Box”.
In his speech on Wednesday in Davos, Trump acknowledged the unease in financial markets over his threats regarding Greenland, by publicly ruling out for the first time using force to seize it.
“The Biggest Taco You Can Get”Whatever the final outcome of the tariffs, European leaders should plan for the worst-case scenario, said David Roche, a veteran investor at Quantum Strategy.
Trump’s Greenland threat is “the biggest ‘taco’ you can have,” Roche said, referring to the phrase “Trump Always Chickens Out,” which defines a market strategy anticipating the president to back down on his threats.
But Roche said that’s becoming a problem: The greater the threat from Trump, the more allies expect him to “move his troops up and down.”
“What the European Union has learned is that if you face them, you win,” Roche said. “No one will believe it anymore.”
