How do you de-risk from the US? 

How do you de-risk from the US? 

“This response to our own allies for sending a small number of troops to Greenland for training is bad for America, bad for American businesses, and bad for America’s allies. It’s great for Putin, Xi and other adversaries who want to see NATO divided. The fact that a small handful of “advisors” are actively pushing for coercive action to seize territory of an ally is beyond stupid.” This is not an exasperated European commentator, much less a liberal Trump hater stateside. It comes straight from Thom Tillis, a Republican senator of North Carolina. A long-time ally of the US president, Tillis broke ranks with him over last year’s Big Beautiful Bill. As he is not seeking re-election in the midterms next autumn, the GOP legislator can afford to be frank on Trump’s decision to slap a 10% extra tariff on European nations sending troops to Greenland.  “It hurts the legacy of President Trump and undercuts all the work he has done to strengthen the NATO alliance over the years.” 

Now, one should not expect a significant number of Congressional Republicans to openly defy the White House. But Tillis surely taps into a sentiment which is widely shared on Capitol Hill. The reasoning is simple:  the costs of annexation far outweigh the economic and security benefits. The US military is already on the island, if the concern is hostile action by China or Russia, and the sky is the limit when it comes to exploratory rights for American companies looking for critical minerals. A full-blown trade war with the EU and possibly with the UK and a rift in the transatlantic alliance is not worth it.

American public opinion appears to be on the same page right from the start. A YouGov-Economist poll from January 2025 showed about 28% support seeking ownership and 47% opposing it.  Back then, only 6% of respondents backed the use of military force to take over Greenland.  A Quinnipiac survey from this month tells the same story. It found that 86% opposed using military force, and 55% opposed buying the island. In other words, Trump is supported by only a small fraction of his base, about 8% according to a third poll.

This does not suggest that the US president would back down on putting pressure on Denmark and the Europeans, all the way to sending the troops to plant the stars and stripes over Greenland. The record shows that his words should be taken literally. Direct conquest is a plausible scenario. However, the lukewarm (at best!) support for such a reckless move by the US political establishment and the public hints at the Europeans’ strategy. The tripwire force despatched to Greenland which includes Danish reinforcements and a symbolic contingent of some 34-35 troops from NATO allies has a twofold purpose. It dispels the argument that the island is under imminent threat from Russia and China which Denmark and other allies are not taking seriously. And, more controversially, the move is signalling that the only way US can take control is via a military invasion and not through a negotiated transfer, purchase and the like. 

Military action raises the stakes domestically with a MAGA base weary of foreign interventions and the midterms around the corner. The brilliant success in Venezuela might have emboldened Trump. However, the capture of Nicolas Maduro did not drive up dramatically his popularity numbers. The administration moreover was careful enough to brand the intervention as a law enforcement operation (notwithstanding the fact that involved some 150 US jets, an aircraft carrier and a group of Delta Force commandos). Though Greenland has a minuscule population, a takeover coupled with occupation and suppression of local opposition, would be a qualitatively different exercise than snatching a Latin American leader in the middle of the night and then pulling out. The US military can do it but the politics around this “small, victorious war”, a phrase the Russian interior minister Plehve used in 1904 in relation to the conflict with Japan, will look different thanks to pushback from different directions.

That is why Trump is using trade and tariffs, rather than the US military, to arm twist the Europeans into throwing Denmark under the proverbial bus.  However, judging from responses his social media post elicited from the leaders of France, Britain and others, Europe is not likely to make a u-turn. The spectre of a trade war is already in the air, with the European Parliament halting the ratification of the asymmetric agreement struck by the European Commission President Ursula von der Leyen last August. Tensions could escalate further, with the EU imposing tariffs on iconic US products such as bourbon or Harley-Davidson motorbikes, as it did last March. Such retaliatory measures target constituencies in battleground states such as Wisconsin and Pennsylvania as well as in the South. European regulators will stick to their guns when it comes to the US tech sector too. If it gets truly nasty, there will be calls to set into motion the Anti-Coercive Instrument – a legislative tool the EU designed, ironically enough, to resist pressure from China.

To be sure, a trade spat over Greenland, not to mention a full-blown crisis triggered by a military operation, would leave both Europe and the US worse off. Estimates show that it could shave off up to 1% of America GDP, increasing prices for both firms and consumers. The effect on Europeans would be even graver. EU’s GDP would take a 1.5% hit in the worst case scenario. But because of the strategic stakes involved in losing territory and sovereignty, one should not assume that the Europeans would simply fold under pressure of tariffs. For what is worth, they are mindful of the examples set by China and Brazil.  Both held their ground against the US and made sure Washington eventually backed down.

The weaponisation of trade over an entirely avoidable crisis offers a lesson.  Any “deal” with Trump is tentative and liable to revision depending on political circumstances. The US administration is all about leveraging uncertainty.  That is bad for business (witness the reluctance of big oil to return to Venezuela despite the White House’s prompts) but also hurts America’s credibility. Whether a country is an ally or an adversary of the US,  it would be rational to hedge against unpredictability and erratic behaviour. Expect diversification of foreign and economic relations – or “de-risking”, to use a fashionable term. The EU’s recent trade deal with Mercosur, an economic bloc involving Brazil, Argentina, Uruguay and Paraguay, but also Canada’s overtures to China, speak volumes about the world we live in. Next in line, the EU-India summit in New Delhi on 27 January.