Blocking China and Russia, even securing Golden Dome and mineral rights… Trump takes everything he can get

Without transferring Greenland’s sovereignty

Possibility of a ‘perpetual lease’ by the U.S.

“Blocking Russia and China’s military influence”

New York stocks also in a ‘TACO trade’

Indexes rebound across the board after tariff rollback

Analysts say U.S. President Donald Trump’s decision to withdraw tariffs he had been poised to impose on European countries opposed to a U.S. troop deployment to Greenland reflects that he had already obtained much of what he wanted. Trump himself said, “We got everything we wanted.”

Trump’s abrupt reversal

Over the course of a single day on the 21st (local time), Trump’s posture toward Europe swung from one extreme to the other over the Greenland dispute. That afternoon, during a 90-minute speech at the World Economic Forum in Davos, Switzerland, he did not hide his combative stance toward Europe. Emphasizing America’s role in World War II, he advanced the strained claim that the U.S. had administered Greenland under trusteeship and later “returned” it to Europe. He also downplayed allies’ role within NATO.

But just four hours after the speech ended, the situation changed dramatically. After meeting with NATO Secretary General Mark Rutte, he was reportedly highly pleased after being offered a NATO “framework” (agreement framework). He immediately posted on social media that he would scrap plans to impose additional tariffs on eight European countries. Speaking to reporters that evening, Trump expressed satisfaction, calling it a “great deal for the United States.”

What was agreed?

While the details of the U.S.-Europe agreement have not been disclosed, a synthesis of foreign media reports suggests it essentially modernizes the existing 1951 Greenland defense agreement. It is presumed to strike a compromise between Europe maintaining the ‘form’ of not transferring Greenland’s sovereignty to the United States, and the United States obtaining the ‘substance’ of being able to use Greenland fully and freely as if it held sovereignty.

Axios reported that the core of the agreement is a plan to allow the United States to build military bases in Greenland and designate defense zones if NATO deems it necessary. Trump said the duration of the measures pursued under the agreement would be “forever.”

Given that, Denmark could adopt a format such as leasing parts of Greenland—an autonomous territory—to the United States in perpetuity. Trump also said the deal includes U.S.-Europe cooperation on the ‘Golden Dome,’ Washington’s next-generation missile defense system, as well as joint development of Greenland’s minerals.

According to The New York Times (NYT), NATO discussions appear to have even considered granting partial sovereignty over U.S. bases in Greenland—similar to the U.K.’s ‘sovereign base areas’ on Cyprus in the Mediterranean. NYT said it is unclear whether such provisions were included in the final framework. The U.K. signed an agreement in 1960 establishing sovereign bases there to maintain a continuous British military presence ahead of Cyprus’ independence.

In a statement after the meeting, NATO spokesperson Alison Hart said, “Negotiations among Denmark, Greenland and the United States will proceed,” adding that “the goal is to prevent Russia and China from establishing economic and military footholds in Greenland.” She added that “(NATO) has made no compromises on (Greenland’s) sovereignty.” It remains unclear how much Greenland itself—the party directly concerned—participated in or consented to the discussions and agreement.

Markets cheer

Markets that had been weighed down as tensions escalated to the point where the use of force among allies was openly discussed surged on news that Trump had withdrawn retaliatory tariffs. All three major New York stock indexes—the Dow, the S&P 500 and the Nasdaq—rose in tandem that day.

The bond market also stabilized. The yield on the 10-year U.S. Treasury note, which had been flashing warning signals about Trump’s foreign policy, fell 0.048% points to 4.25% annually. Bloomberg reported that demand also flooded into an auction of 20-year Treasuries. As risk appetite returned, the prices of Bitcoin and Ethereum also jumped sharply.

Europe, however, remains on guard. Given Trump’s strong fixation on ownership—saying, “Who wants to keep a usage-rights contract or a lease contract?”—it cannot be ruled out that merely expanding activity in Greenland may not satisfy him.

Russia’s active support for Trump’s plan to secure Greenland, which stokes divisions within NATO, is also a source of unease for Europe.

Washington=Correspondent Lee Sang-eun selee@hankyung.com