A profound crisis has erupted across the transatlantic alliance, triggered by US President Donald Trump's forceful demand to acquire Greenland, a semi-autonomous territory of Denmark. Trump's stance, reiterated at the World Economic Forum in Davos, insists that US control over Greenland is "imperative for National and World Security," citing perceived threats from Russia and China in the Arctic region. To enforce his demand, Trump has threatened to impose 10% tariffs, escalating to 25% by June, on exports from eight European countries: Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the United Kingdom, should they oppose his plan. This aggressive "tariff diplomacy" has been underscored by his use of digitally altered images on social media, depicting Greenland as US territory and portraying European leaders looking at a map showing the expanded US. He also proposed what he calls the "Donroe Doctrine," echoing his agenda of US territorial expansion and unilateral action.

Adding another layer of complexity, Trump has controversially linked his Greenland ambition to the United Kingdom's decision to cede the Chagos Islands to Mauritius. He criticized this as an "act of great stupidity" and "total weakness," particularly concerning Diego Garcia, which hosts a vital US-UK military base. Trump argued that this handover justifies his demand for Greenland, implying a failure by allies to protect strategic assets. UK government spokespersons, along with US Secretary of State Marco Rubio in May 2025, have defended the Chagos deal as a legal necessity that secures the base's operations for generations and was welcomed by key allies. However, the move has drawn significant opposition from Conservative and Reform UK politicians, who echo Trump's concerns about national security and potential Chinese influence.

European leaders have responded with a mix of condemnation, calls for diplomacy, and preparations for potential retaliation. Ursula von der Leyen, President of the European Commission, while advocating for "European independence" at Davos, warned that the EU's response would be "unflinching, united and proportional" if tariffs are enacted. She emphasized the importance of Arctic security as a shared interest and announced a "massive" surge in investment for Greenland's local economy and infrastructure, alongside strengthening cooperation with Western allies. A joint statement from the eight targeted European countries affirmed full solidarity with Denmark and Greenland, calling the tariff threats an undermining of transatlantic relations and a risk of a "dangerous downward spiral." Despite this unity, internal divisions exist within the bloc on whether to deploy the EU's "trade bazooka" (Anti-Coercion Instrument), a mechanism for broader tit-for-tat measures across economic sectors, though some leaders, like those from France and Germany, have signaled support for keeping all options on the table.

The economic repercussions of Trump's threats have been swift and negative. Global stock markets, including the UK's FTSE 100 and major European indices, experienced significant declines. Gold and silver prices surged as investors sought safe-haven assets. Industries such as luxury goods, cruise operators, and fashion are projected to be hit by the tariffs. US Treasury Secretary Scott Bessent, speaking in Davos, urged European countries to "take a deep breath" and avoid retaliation, warning against an escalation into a trade war, despite acknowledging that Trump is looking at Greenland as a strategic asset. The discussion also included concerns about Europe's substantial holdings of US debt, with some analysts suggesting Europe could weaponize this financial leverage, although Bessent dismissed this as a "false narrative."

The crisis has also laid bare Trump's profound disregard for multilateral institutions and the post-World War II liberal rules-based order. His proposal for a "Board of Peace" to oversee Gaza's reconstruction, which he reportedly wants to staff with leaders like Vladimir Putin and charge $1 billion for permanent membership, is seen by many, including French President Emmanuel Macron, as an attempt to rival the United Nations. Macron notably refused an invitation to join this board, citing concerns about undermining UN principles. This unilateral approach contrasts sharply with European leaders' renewed commitment to international law, diplomacy, and multilateral cooperation, as articulated by figures like Gordon Brown and Keir Starmer, who argue for building a new global framework based on shared values and shared power in a multipolar world.

In response to the escalating tensions, diplomatic efforts are underway. European leaders are set to convene an extraordinary summit in Brussels to forge a common position. US Speaker Mike Johnson, a Republican ally of Trump, visited London to "calm the waters," assuring that differences could be worked through "calmly as friends." Macron also attempted direct communication with Trump, proposing a G7 meeting and dinner in Paris. Meanwhile, Danish and Greenlandic officials have reaffirmed their unwavering commitment to sovereignty, with public protests in Greenland echoing the sentiment "Greenland Is Not For Sale." The unfolding situation presents Europe with an "impossible puzzle": balancing the need to defend its allies and principles against the risk of alienating the US, a crucial security guarantor. The outcome will likely redefine transatlantic relations and reshape the global strategic landscape for years to come.