European leaders are confronting what many describe as one of the most serious transatlantic trade and diplomatic crises in decades. In an emergency meeting in Brussels on Sunday to weigh how to confront US President Donald Trump‘s tariff ultimatum linked to his bid to acquire Greenland, the European Union found itself balancing economic risk and geopolitical principle.
The stakes could not be higher: tariffs that target European economies risk retaliatory measures, deepening divisions amongst allies and potentially restructuring global supply chains. EU diplomats deliberated whether to respond in kind to the threatened levies and what that would mean for ordinary citizens and businesses across the continent.
Trump’s Ultimatum
On Saturday, President Trump announced he would impose a 10 per cent import tariff on goods from eight European nations, including Denmark, France, Germany, the United Kingdom, the Netherlands, Norway, and Sweden, because of their opposition to his efforts to acquire Greenland and perceived European military activity there.
The tariffs are set to begin on 1 February and could rise to 25 per cent on 1 June unless a deal is struck over Greenland. The White House framed these measures in terms of national security and strategic interests in the Arctic, citing Greenland’s location and resources as critical. Yet critics in Europe see them as coercive and damaging to long-standing alliances.
European Response
Leaders from the targeted nations issued a joint statement warning that Trump’s actions ‘undermine transatlantic relations and risk a dangerous downward spiral’. European Commission President Ursula von der Leyen echoed this view, stressing solidarity with Denmark and the people of Greenland whilst calling for dialogue.
Yet behind the unity, there is a deep awareness of the economic stakes. The European Union is a single economic bloc, meaning tariffs against individual nations would, in effect, hit all 27 members, potentially harming jobs, exports and households now already grappling with inflationary pressures.
The dispute has reignited discussion over the EU’s so-called trade ‘bazooka’, a powerful anti-coercion tool that could, in theory, be used against US companies or goods in retaliation. Whilst some leaders, notably France’s Emmanuel Macron, have called for activating it, others caution against escalating a full trade war.
[embedded content]
Economic Impact
European manufacturers fear tariffs could make their goods more expensive in the US market, affecting competitiveness and potentially leading to job losses. Export-driven economies such as Germany’s automotive and machinery sectors could feel the strain most acutely.
Consumers across the EU may also see price increases on everyday imports from the United States, from cereals to tech products, squeezing household budgets already under pressure. For farmers, already struggling with volatile markets and climate challenges, new trade barriers could spell financial hardship and reduced export opportunities.
Alliance Under Strain
The crisis has put renewed focus on NATO and broader security cooperation. European leaders have emphasised that Greenland’s future, and that of its 57,000 inhabitants, should be determined by the people and Denmark, not imposed externally.
EU foreign policy chief Kaja Kallas warned that ‘China and Russia must be having a field day’, emphasising how divisions amongst Western allies can embolden geopolitical rivals. Tensions over Greenland and trade threaten to distract allies from shared security priorities in Ukraine and beyond.
As EU envoys met in Brussels, many voices pushed for continued diplomatic engagement with Washington, hoping to avoid a damaging tit-for-tat trade war. Others argued that Europe must not be seen as weak in the face of coercive tactics. Leaders are due to gather for an extraordinary summit this week to refine the EU’s collective response.