US President Donald Trump Donald Trump has threatened eight European countries – Denmark, Sweden, Norway, Finland, Great Britain, France and Germany and the Netherlands – with a 10 per cent tariff on all goods coming into the United States from February 1 until he is able to buy Greenland. File image/Reuters
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Firstpost19-01-2026, 20:01

Trump's Greenland Tariff Threat: Reshaping Alliance Dynamics and Global Trade

  • US President Donald Trump's tariff threat over Greenland sale signals a structural shift in economic power within alliances, impacting European allies.
  • Trade agreements with Washington are no longer seen as stabilizing commitments, as tariffs can be imposed for non-trade objectives.
  • Europe faces the collapse of trade agreement commitment functions, issue separability, and institutional asymmetry.
  • The article suggests Europe must reclassify US trade commitments as contingent, activate deterrence via the Anti-Coercion Instrument, and diversify trade.
  • For other US allies, the episode implies alignment doesn't guarantee predictability, trade agreements become hegemon's options, and accelerates hedging behavior.

Why It Matters: Trump's Greenland tariff threat fundamentally alters alliance logic, making trade agreements instruments of statecraft.

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