Trade War Escalates: Europe Freezes US Deal Over Trump’s Greenland Gambit & Tariff Threats

Geopolitical shockwaves just hit the global economy. A major transatlantic trade pact is now on ice—frozen solid by a sudden diplomatic deep freeze.

The Greenland Gambit Backfires

Brussels slammed the brakes on the long-negotiated deal. The catalyst? A revived push from the former US administration to purchase Greenland, paired with fresh tariff threats targeting European goods. Negotiators viewed the move as a blatant power play, undermining the very trust needed for a partnership.

Markets Hate Uncertainty

This isn't just about fish tariffs or agricultural quotas. It's a stark reminder that traditional finance remains shackled to political whims. One leader's real estate fantasy can derail years of economic planning—meanwhile, decentralized assets trade 24/7, utterly indifferent to which flag flies over which glacier.

The New Cold Front

The freeze signals a dangerous return to zero-sum thinking. It forces allies to recalculate their strategic dependencies, from energy to technology. When the old guard plays geopolitical chess, the cost is measured in stalled growth and missed opportunities for everyone else.

So, another grand plan gets buried in permafrost. Wall Street will fret, analysts will downgrade forecasts, and traders will chase the next headline—proving once again that the most volatile currency in the world isn't Bitcoin; it's political stability.

EU trade chair slams Trump’s Greenland plan and tariff threat

Lange accused Trump of “using tariffs as an instrument of political pressure” to get what he wants.“He wants to have Greenland as part of the United States as quick as possible,” Lange said.

Though Trump promised during his Davos speech not to use military force, Lange called that only “a small positive element.” The tariff threat, according to him, is still very real. “There will be no possibility of compromise” unless the threat is removed.

The proposed duties are seen as a direct violation of the EU-US trade pact terms. Lange warned that Europe will not proceed until Washington scraps the tariff plan. He called Trump’s actions “an attack against the economic and territorial sovereignty of the European Union.” On Monday, INTA will debate using the Anti-Coercion Instrument (ACI), a sweeping trade weapon created to counter exactly these kinds of pressure tactics.

The ACI, often referred to as a “trade bazooka,” WOULD let Europe severely limit American firms’ access to the EU market. This includes kicking U.S. companies out of tenders, slowing capital flows, restricting foreign investment, and cutting market access across the bloc.

“This was created exactly for such a case when a foreign country [uses] tariffs and investment for political and coercive pressure,” Lange said.

White House pushes back as ECB warns of monetary spillover

U.S. Trade Representative Jamieson Greer hit back, blaming the EU for delays. “The EU has failed to implement its commitments under the deal despite rapid US moves to reduce its tariffs on the EU last year,” Greer told CNBC.

He said Europe is using unrelated political issues as excuses for noncompliance. “The United States and EU have—and will always have—a number of foreign policy and economic matters that fall outside the four corners of the deal.”

Joachim Nagel, the Bundesbank President and a European Central Bank official, also spoke to CNBC on Wednesday. He called the standoff “a very problematic situation,” and said the tariff fight might spill over into monetary policy.

“It could maybe be a game changer for monetary policy in the euro zone,” he said. Still, Nagel expressed some optimism, saying, “I still have the hope that we can find a solution, a joint understanding.”

Shortly after the suspension was announced, Trump caved in and posted a statement on Truth Social, saying he had reached “the framework of a future deal with respect to Greenland” after a “very productive meeting” with NATO Secretary General Mark Rutte.

He claimed the deal would benefit both the United States and NATO nations, and said he would not impose the tariffs scheduled for February 1st.

“Additional discussions are being held concerning The Golden Dome as it pertains to Greenland,” Trump wrote. He named Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and others as the negotiation team, reporting directly to him. “Further information will be made available as discussions progress,” Trump said. The post got pinned on his profile too.

If you're reading this, you’re already ahead. Stay there with our newsletter.