paid-only post Jan 22, 2026 Gem

Why did Trump back down on Greenland?

Plus: What does this mean for Law Firms?

For a brief, uneasy moment, Europe found itself staring down something that felt unthinkable: a US president openly threatening tariffs and hinting at force over Greenland.

Then, almost overnight, Trump hit pause. No tariffs. No takeover. Instead, a Nato-brokered “framework” and a vague promise of future talks.

So what changed? And what does this mean for Law Firms?

Why Trump Pulled Back

Trump’s original move combined two familiar tools from his playbook: economic pressure (tariffs) and maximalist rhetoric (“we need Greenland”). The aim was leverage. By floating extreme outcomes, he forced allies into emergency mode and dragged Arctic security to the top of the agenda.

But the backlash was swift and serious. EU leaders convened an emergency summit. Denmark drew a firm sovereignty line. Nato was pulled in. What began as a pressure tactic risked becoming a full-blown transatlantic crisis, one that threatened US credibility inside its most important alliance.

At that point, Trump pivoted.

Meeting Nato secretary-general Mark Rutte gave Trump a face-saving exit. He could claim a “deal framework” without actually getting ownership of Greenland, while presenting himself as the architect of a broader Arctic security solution. Crucially, it let him step back from tariffs without looking like he’d been forced to.

Why the Tariffs were dropped

The tariff threat was always conditional. Trump explicitly linked it to EU opposition to his Greenland ambitions. Once he could announce progress, the tariffs became unnecessary and politically costly.

Pulling them back achieves three things:

It avoids an immediate trade war with Europe.
It shifts the focus from economic coercion to security cooperation.
It keeps the pressure alive without detonating it.

For Europe, the relief is real but fragile. As one EU official put it, Trump could change his mind tomorrow.

Why Greenland still matters to the US

Trump wants Greenland for several reasons:

🪖 Strategic military location: Greenland sits between North America and Europe and hosts key US radar and defence infrastructure. Control over the island strengthens missile detection and Arctic defence capabilities.
🚢 Arctic shipping routes: Melting ice is opening new Arctic sea lanes, making Greenland increasingly important for future global trade routes and naval access.
🪨 Natural resources: Greenland is rich in rare earth minerals critical for defence technology, electric vehicles and semiconductors, reducing reliance on Chinese supply chains.

The US is also concerned about Russia and China gaining influence in the region. Greenland, sitting between North America and Europe, is a key piece of that puzzle.