Nato is facing one of its most serious crises in decades after Donald Trump threatened to impose tariffs on allies who oppose a US takeover of Greenland.
UK Prime Minister Keir Starmer directly challenged the US President in a phone call, telling him that using tariffs against allies for defending Nato security is wrong. A senior UK government figure warned the situation was so serious that Nato could be “heading for disaster.”
Trump Threatens Tariffs Over Greenland
President Trump has renewed his long-standing desire for the US to acquire Greenland, a self-governing territory within the Kingdom of Denmark. He claims the island is vital for American security and has suggested it could be at risk from China.
Over the weekend, Trump escalated the dispute by announcing that the US would impose a 10% tariff from February 1 on exports from Denmark, the UK, France, Germany, Finland, Sweden, Norway, and the Netherlands. He said the tariff would rise to 25% in June unless a deal is reached for the “complete and total purchase” of Greenland.
The move shocked Nato allies and triggered widespread condemnation.
Europe Considers £81bn Trade Retaliation
In response, European leaders are considering using the EU’s anti-coercion instrument, known as the “trade bazooka.” This could impose up to £81 billion in tariffs on US goods.
The tool, introduced in 2023, allows the EU to:
- Restrict access to public contracts
- Limit trade licences
- Block access to the single market
European leaders warned that Trump’s actions risk a “dangerous downward spiral” in transatlantic relations.
UK and Allies Push Back
Downing Street confirmed that Starmer spoke with:
- Danish Prime Minister Mette Frederiksen
- European Commission President Ursula von der Leyen
- Nato Secretary General Mark Rutte
- President Donald Trump
Starmer said Arctic security is a shared Nato responsibility and defended joint military exercises in Greenland, stressing they pose “no threat to anyone.”
The eight affected countries issued a joint statement condemning the tariff threat and expressing full support for Denmark and the people of Greenland.
Frederiksen said Europe would not be blackmailed, while US Treasury Secretary Scott Bessent accused Europe of projecting weakness and claimed US security requires Greenland to be part of America.
Nato’s Future at Risk
Former senior diplomat Lord McDonald warned that any military clash between Nato allies over Greenland would effectively end the alliance.
Some UK politicians have called for the King’s planned state visit to the US to be cancelled. However, Culture Secretary Lisa Nandy rejected the idea, saying diplomacy—not symbolic gestures—is needed because jobs and livelihoods are at stake.
Starmer is expected to raise the issue directly with Trump at the Davos summit later this week.
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