As the European Union tries to agree on a response to Donald Trump's latest threats to punish European countries with tariffs if he fails to reach an agreement on taking over Greenland, differences in approach among key members are becoming increasingly apparent.
German Chancellor Friedrich Merz yesterday sought to prevent the clash with Donald Trump over Greenland from turning into a new trade war between Europe and the US, calling for a "sober" response to the US president's latest tariff threats.
Such an approach highlighted tactical differences within the EU over how to respond to Trump's threat to impose new tariffs on several European countries as early as next month.
French President Emmanuel Macron on Sunday called on Brussels to activate the EU's Anti-Coercion Instrument (ACI), the European Union's "trade bazooka", in response to Trump's threat to impose new tariffs on European countries as early as next month.
Merz, on the other hand, called for a less confrontational approach to Trump, acknowledging that a trade war would be particularly damaging to Germany's export-oriented economy, while at the same time expressing confidence that Berlin and Paris would find common ground.
“France is affected by the US tariffs to a different extent than we are, and in that sense I understand that the French government and the French president want to react a little more harshly than we do,” Merce said. “However, we are trying to adopt and we will manage to find a common position” before EU leaders meet in Brussels on Thursday.
German officials have often expressed frustration that Macron is willing to take a more combative approach to Trump but has not worked as aggressively to strengthen Europe's autonomy from the United States by striking additional trade deals with other parts of the world, Politico reports. French opposition, for example, has long held up Europe's agreement with the Mercosur trade bloc in South America.
Merz said he would try to meet with Trump on Wednesday in Davos to reduce tensions and change the president's mind on tariffs, saying he believed a joint solution to protect Greenland and avoid a trade war was still achievable.
“We know from the experience of the last 12 months that Trump threatens tariffs over and over again,” Merck said. “He often does, but often enough, conversations and negotiations with him lead to him backing down. And that has been my strategy for the last nine months, or the last eight months, since I took office. And I will continue to implement it in exactly the same way.”
In contrast, the French president has been much more outspoken and forceful in confronting Trump’s trade threats. “No intimidation or threats will affect us,” Macron said in a post on the X network over the weekend. “Tariff threats are unacceptable and have no place in this context. If they are confirmed, the Europeans will respond in a united and coordinated manner. We will ensure that European sovereignty is preserved. I will speak in this spirit with our European partners.”
Merz also did not rule out the possibility of European retaliation if Trump does impose tariffs, although he did not specifically mention the so-called EU trade bazooka.
“We have a range of instruments at our disposal and we agree that we do not want to use them,” Merc said. “But if we have to use them, then we will do so. To what extent, with what intensity? That will depend on the situation that develops in relations with the American administration.”
Danish Foreign Minister Lars Lokke Rasmussen said yesterday that it is up to the EU, not just Denmark, to decide on the EU's response to Trump's threats to impose tariffs over Greenland.
However, his Hungarian counterpart, Peter Szijjarto, believes that the future of Greenland is not an EU issue and indicated that Hungary would not support a joint EU response. “We consider this a bilateral issue that can be resolved through talks between the two sides... I don’t think it is an EU issue,” Szijjarto said.
British Prime Minister Keir Starmer called for calm discussion among allies, adding that he did not believe Trump was considering military action to take over Greenland.
Italian Prime Minister Giorgi Meloni told a news conference in South Korea yesterday that “in moments like these, we need a pragmatic, constructive leader, focused on reducing tensions.” Meloni has increasingly been positioned as a possible mediator between Europe and Trump. On Sunday, she told reporters that she believed the tariff threats were the result of a “misunderstanding” and that she was “working to reduce tensions.”
EU leaders are due to discuss options at an emergency summit in Brussels on Thursday, including a package of tariffs worth 93 billion euros ($107,7 billion) on US imports, which could automatically take effect on February 6, after a six-month pause.
Another option is the never-before-used “Anti-Coercion Instrument” (ACI), which could restrict access to public tenders, investments or banking activities, or restrict trade in services, in which the US has a trade surplus with the bloc.
Analysts say the key question is how Europe will respond, with a classic trade war, with reciprocal tariffs on a tit-for-tat basis, or with an even tougher approach.
"The most likely path forward is a return to the trade war that was postponed over the summer by US agreements with the UK and the EU," Carsten Nickel, deputy director of research at Tenet in London, told Reuters.
The European Union's High Representative for Foreign Affairs and Security Policy, Kaja Kalas, said yesterday that Europe has no interest in entering into conflict with the United States, but that it has a range of tools with which it can protect its interests. "Arctic security is a common transatlantic interest and we can discuss this with our American allies. But threats of tariffs are not the way to do it," Kalas wrote in a post on the social network X, after a meeting in Brussels with Danish Defense Minister Troels Lund Poulsen and Greenland's Foreign Minister Vivian Mocfeldt.
"Sovereignty is not a commodity for trade. We have no interest in seeking conflict, but we will stand our ground. Europe has a whole range of tools to protect its interests," she added.
European governments should not retaliate against any measures taken by the United States in the Greenland dispute, US Treasury Secretary Scott Besant said yesterday. “I think that would be very unwise,” Besant told reporters, answering a question about retaliatory trade measures on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland.
He urged Europe not to doubt US President Donald Trump's intentions regarding Greenland. "I was on the road, so I wasn't in contact (with European officials), but I spoke to President Trump and obviously there are a lot of people who are coming forward, and I think everyone should take the president seriously and take his word for it," Besant said.
Trump yesterday linked his intention to take control of Greenland to his failure to win the Nobel Peace Prize, saying he was no longer thinking "exclusively about peace."
In a written message to Norwegian Prime Minister Jonas Gahr Store, seen by Reuters, Trump wrote: "Given that your country has decided not to award me the Nobel Peace Prize for stopping more than eight wars, I no longer feel obligated to think exclusively about peace, although that will always prevail, but I can now think about what is good and right for the United States."
In a brief telephone interview with NBC yesterday, when asked if he would use force to take over Greenland, Trump said: "No comment," adding that he would "100 percent" implement plans to impose tariffs on European countries if there is no deal on Greenland.
The blow that Europe needed
Manufacturers are frantically trying to figure out whether to ship as many products as possible to the US before tariffs are imposed, as they were forced to do in April last year, when Trump announced the levies on his "liberation day".
The threat over Greenland may have been just the shock Europe needed to toughen its approach and focus on developing its own joint programs to be more independent of the United States, Oliver Burkhard, CEO of German submarine manufacturer TKMS, told Reuters.
"It probably takes... getting a kick in the shin to realize that we may have to prepare differently in the future," he told Reuters.
An official from a French industrial association, which represents the country's largest companies, said the Greenland issue was turning tariffs into a "tool of political pressure" and called on the region to reduce its dependence on the US market.
Neil Shearing, group chief economist at Capital Economics, pointed out that some EU countries, Spain, Italy and others, are not on the tariff list, which is likely to lead to "rerouting" of trade within the EU's free trade zone to avoid the levies.
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