Trump says ‘framework of a deal’ reached on Greenland; Denmark welcomes announcement

AUSTIN/DAVOS – In what he presented as a breakthrough but appeared to amount to at least a partial retreat, US President Trump said he had reached the “framework of a future deal” on Greenland and withdrew

tariffs on Europe that he had announced days ago

.

No details of the deal are available and it remains unclear if it will involve the US taking ownership of Greenland as Mr Trump has demanded.

In a quick reaction, Denmark’s foreign minister Lars Lokke Rasmussen welcomed Mr Trump’s announcement, saying “the day ends better than the day started”. 

But he seemed to throw cold water on the surrender of Greenland to the US. “It is not going to happen that the USA will own Greenland. That is a red line,” Mr Rasmussen said.

The framework, which Mr Trump described as a “little bit complex”

was reached during his talks with NATO Secretary-General Mark Rutte.

The negotiations were held hours after Mr Trump’s lengthy address at the World Economic Forum in Davos during which he ruled out the use of force to acquire Greenland.

“This solution, if consummated, will be a great one for the United States of America, and all NATO Nations,” Mr Trump wrote on Truth Social after the meeting with Mr Rutte.

“Additional discussions are being held concerning the Golden Dome as it pertains to Greenland,” he said, referring to a proposed missile defence shield to protect the US mainland. 

He added that Vice President JD Vance, Secretary of State Marco Rubio and Special Envoy Steve Witkoff will be responsible for further negotiations on Greenland.

In comments to the media in between meetings during an eventful day at Davos, Mr Trump said the deal “put everybody in a really good position, especially as it pertains to security and minerals and everything else”. 

Asked how long the deal would last, he said: “Infinite…there is no time limit, it is forever…it is signed forever.”

The forthcoming deal could include giving the US the right of first refusal on investments in Greenland’s mineral resources, The Wall Street Journal reported, citing unnamed officials. 

It is in exchange for this clause, which would keep Russia and China from tapping the island’s wealth, that Mr Trump rolled back on his tariff threat, the report said.

The US stock markets rallied as the threat to US-Europe trade faded, with the S&P 500 jumping by 1.2 per cent.

In his special address before a 600-plus audience earlier in the day, Mr Trump said he was seeking immediate negotiations to discuss the acquisition of Greenland.

He cast his demand as a “small ask” that was purely for national security and had nothing to do with access to Greenland’s deposits of rare earth minerals crucial for powering the economy and critical to sustain US primacy over rival China.

Eventful speech at Davos

In a speech at the World Economic Forum in Davos that frequently went off script and lasted well over an hour, Mr Trump made the case that the US alone can “protect this giant piece of ice, develop it and improve it”.

“And that’s the reason I’m seeking immediate negotiations to once again discuss the acquisition in Greenland by the United States,” he said on Jan 21 as the packed room of over 600 people - including heads of states, corporate chiefs and diplomats - shifted in their seats and absorbed the latest turn in the escalating drama in silence.

“This enormous unsecured island is actually part of North America, on the northern frontier of the Western Hemisphere. That’s our territory. It is, therefore, a core national security interest of the United States. And it’s been our policy for hundreds of years to prevent outside threats from entering our hemisphere,” he said.

The US would be “unstoppable” if it used force, he said. “But I won’t do that.”

“People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force,” he said in comments that may bring down tensions in Greenland where the government had begun preparing for an invasion.

He repeated his contention that the US would have to “own” Greenland to defend it effectively.

“You can’t defend it on a lease. Number one, legally, it’s not defensible that way. And number two, psychologically, who the hell wants to defend a licence agreement or a lease, which is a large piece of ice in the middle of the ocean where, if there is a war, much of the action will take place on that piece of ice.”

“They have a choice,” he said, underlining his strategy in the negotiations as he holds more meetings with European leaders at Davos.

“You can say yes and we will be very appreciative, or you can say no and we will remember.”

Mr Trump criticised NATO for not pulling its weight, saying the US had borne almost all of the financial burden of the alliance, knocking Denmark for losing to Germany “in six hours” during World War II, and calling it “ungrateful” for US help.

“The problem with NATO is that we’ll be there for them 100 per cent but I’m not sure that they will be there for us if we gave them the call,” he said.

Europe has been scrambling to evaluate its options against Mr Trump’s takeover bid. Dependent on NATO for its security, the continent lacks the bargaining power of China, which used its monopoly of rare earths to force Mr Trump to blink in his tariff war with Beijing.

In a clear snub, Danish Prime Minister Mette Frederiksen chose to skip Davos altogether, while French President Emanuel Macron left early after saying in his Jan 20 speech that Europe “should not hesitate to deploy” tools at its disposal to protect its interests.

Mr Trump also trained his guns on Canadian Prime Minister Mark Carney, who received a standing ovation for his speech a day earlier in which he declared a “rupture” to the world order and urged smaller nations to get together to offset the power of the US, China and Russia.

Last week, Mr Carney struck a trade deal with China on the first visit there by a Canadian prime minister in eight years. China has recently been more “predictable” than America, he said.

In a pointed riposte, Mr Trump took aim at him. “Canada gets a lot of freebies from us, by the way. They should be grateful also, but they’re not. Remember that, Mark, the next time you make your statements,” he said.

‘He insulted these people right to their faces’

Attendees were aghast at both the language and abrasiveness of the US President’s speech.

“The mask is off. We are stronger so you do what we tell you to,” one American investment banking chair said.

“It’s incredible. He insulted these people right to their faces,” the banker said, referring to Mr Trump’s remarks that Europeans were losers and that Somali pirates had higher IQ than expected. The last remark elicited a boo from an unidentified audience member.

A Canadian banking executive underlined the serious issues at play. “His push for Greenland touches on something core and fundamentally different – sovereignty,” he said.

“Liberation Day was a jolt and a rude awakening, but this is existential.”

One Indian oil trader, however, thought otherwise. “Honestly, the Europe bashing was expected. Europeans should learn to work with him.

“It hasn’t been easy for India either. Textiles and many other industries have been impacted and will be for a few more years. But we will live.”

At the end of his 1½ hour turn on the Davos stage, Mr Trump left little room for doubt that the US would not ease up on its demand for Greenland.

The world’s largest island, he said, is vital for his Golden Dome project, a space-based project capable of intercepting missiles.

Europe sees Mr Trump’s demand as superfluous; the US already has a base there focused on missile early warning systems and is free to build more bases under the agreement it has with Denmark.

To press his demands, Mr Trump had threatened new tariffs of 10 per cent, starting from Feb 1, on Denmark and seven other European nations which oppose the idea of the US taking control of Greenland and have deployed a small, largely symbolic number of troops to the island. 

Will Trump table a bid to buy Greenland?

It remains to be seen if the real estate mogul, who puts a lot of stock by his dealmaking, will in the coming days table a bid to buy the world’s largest island and ratify the purchase with a treaty with Denmark and Greenland.

The “price” is reportedly around US$700 billion, an amount that would blow a large hole in US finances already impaired with a debt burden of US$38 trillion. And neither Denmark nor Greenland have flinched from their opposition to a sale.

A two-thirds majority in the Senate is required to ratify a treaty. To get 67 senators on his side, Mr Trump would need to reach across the aisle to Democrats. Can he make them an offer they can’t refuse? It looks highly unlikely.

The US Congress has reacted cautiously to his Greenland moves. Some bipartisan Bills have been introduced to make it necessary for Mr Trump to seek authorisation for the use of force against a US ally. The lawmakers are also trying to limit his use of funds to assert control over the sovereign territory of a NATO member state. 

Nor is taking Greenland an idea that finds favour with most Americans who would rather have their president solve their bread-and-butter issues.

Nevertheless, Mr Trump had appeared willing to risk shattering the transatlantic NATO alliance, decoupling with Europe and Canada, disrupting the US economy and muddying his own presidential legacy alongside his party’s chances in the mid-term elections later this year.

A smashed NATO would mean the possible loss of its military bases in Germany, Britain, Italy, Poland and more elsewhere that the US uses to project force in the Middle East and Africa. 

An estranged Europe would leave the US with sole responsibility for defending the Arctic. He also needs European help with his other high profile initiatives like the “Board of Peace” to stabilise and rebuild Gaza. Ending the war in Ukraine will slide off the agenda altogether.

A substantial chunk of Mr Trump’s speech was devoted to warning Europe that it was “not heading in the right direction” and was plagued by problems “driven by the largest wave of mass migration in human history”.

The US, on the other hand, was seeing “the fastest and most dramatic economic turnaround in our country’s history”, Mr Trump said.

“The USA is the economic engine on the planet, and when it booms, the entire world booms,” he added. “You all follow us down, and you follow us up.”

Mr Trump will hold the first meeting of his ‘Board of Peace’ in Davos on Jan 22. More than 30 world leaders have committed to join the board. Singapore, which is among 50-or so nations invited to join the US-led initiative, is assessing its options.