Europe Can Impose Costs on Trump Over Greenland, But Looks Too Craven To Try

[This post launched before complete because reasons. Please return at 7:30 AM EST for a final version]

As Richard Nixon was wont to say, to make one thing perfectly clear, your truly is not about to argue that the shambolic European leaders could muster up the spine and organization to go toe to toe with Trump. But it is still important to counter the view expressed that the US is too powerful to be contested over Trump’s clearly keenly desired Greenland heist. So far, in addition to threatening invasion, Trump’s big bludgeon is the threat of additional tariffs.

We’ll go through some of the measure that Europeans could deploy, but the biggest is already starting to play out, which is freaking out investors who will pull back from US investments, particularly risky ones like stocks. Recall that Trump the tariff enthusiast retreated substantially after his Liberation Day shock and awe as US stocks and the dollar swooned as foreign investors cut their exposures.¹

Note that the blustering in the media about the Europeans flexing muscles by dumping Treasuries is misguided, even before getting to the fact that, as we have discussed, that the Fed could directly monetize the Federal deficit. There is no operational need to issue Treasury bonds; it’s a political holdover from the gold standard days. We also have this tweet in Links because the beliefs it debunks are far too prevalent:

Rumours first circulated last month Europe and UK had threatened to liquidate US Treasuries as a 'nuclear option' if Trump does a deal with Putin to end the Ukraine war against European interests. The rumour is back as potential retaliation for invading Greenland.

If true, it… https://t.co/ouNUeAZwSH

— Kathleen Tyson (@Kathleen_Tyson_) January 19, 2026

Bloomberg’s US landing page shows that investors are already rattled:

The front page of the Financial Times. Do not miss the subhead of the top story; investors not reassured by Trump’s latest:

The Wall Street Journal, joining the pink paper, also has a live blog:

The fact that European leaders are not making more of a ruckus (which would usefully rattle Mr. Market’s further) is yet more proof of the over-abundant evidence of a lack of unity, resolve, and ability to plan their way out of a paper bag. They are running to Davos to try to reason with Trump. That is a demonstration of how insanely out of touch they are with Trump’s very clear belief that he can bully them successfully, as just did with the craven María Corina Machado over her Peace Prize. Did they not comprehend that every time they went to him thinking they could get him on board with more money and weapons and security guarantees and whatnot with Project Ukraine, they got at most some supportive noises that came to naught?

But having said that, the fact that ought-to-be vassal Zelensky is still in his post long after what should have been his sell-by date does demonstrate that even weakly-positioned parties can wage fairly effective delaying tactics against Trump. Remember when Scott Bessent showed up in Kiev demanding that Zelensky immediately sign the “raw earths” deal? Zelensky refused and managed to draw out the negotiations long enough so as to get something only moderately awful, as opposed to abjectly terrible. One strategy for the Europeans would be to at least go through the motions of negotiating, since odds are decent that the tariff authority that Trump is relying on to impose across-the-board tariffs will be ended or substantially curtailed by the Supreme Court. Fortune confirms this possibility in a fresh story, The U.S. Supreme Court could throw a wrench into Trump’s plan to take Greenland as soon as Tuesday:

The U.S. Supreme Court could rule on Tuesday that President Donald Trump’s trade tariffs are illegal—and that would throw up a significant hurdle for his plan to acquire Greenland.

President Trump posted his latest threat to take over Greenland late last night on Truth Social: “Now it is time, and it will be done!!!”

Previously, on Saturday, he threatened to impose tariffs of 10%, on Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands, and Finland, rising to 25% on June 1, “until such time as a Deal is reached for the Complete and Total purchase of Greenland.”

But analysts noted this morning that the court is due to issue rulings on Tuesday and Wednesday of this week. The expectation on Wall Street is that the court will rule that the president does not have the power under the International Emergency Economic Powers Act (IEEPA) to impose tariffs on routine international trade. If that happens, Trump’s threats could become meaningless, at least in the short-term.

“Threatened U.S. tariffs … may be overturned by the U.S. Supreme Court,” UBS advised clients in a note this morning.
At ING, Carsten Brzeski and Bert Colijn said, “If the Supreme Court rules against all earlier IEEPA tariffs, Trump’s latest announcement [about Greenland] would be void, and he would have to find other tariffs. Something that would take more time.”

My impression was that this decision was not expected this early in the year, but Wall Street analysts get paid big bucks to stay on top of matters like this, so they probably do have a better reading on timing. But it’s not just a matter of “finding other tariffs”. The fallbacks are either sector-specific and require a Commerce Department study before imposition, or are much more limited in time and amount.

Jeff Rich argues that the Europeans have other cards to play. Note he has one error, in that he recommends revoking the 2025 trade pact with the US. In fact, it has not been ratified by the EU Parliament and that action has been put on hold due to the Greenland threat:

Europe has three potential responses to American pressure: economic, diplomatic and security responses. But all require European Union states deciding to stop accepting subordination to American unilateralism.

First, retaliatory tariff measures remain available. It can implement measures as proposed by President Macron using the Anti-Coercive Instrument of the EU. Europe might even revoke the coerced, disadvantageous trade agreement of 2025. In addition, Europe needs to recall that tariffs are an ineffective instrument of economic warfare. Trump’s Liberation Day proved a flop, defeated by combined international cooperation and strong resilience from China and India in particular. Tariffs ultimately represent American self-harm, demonstrating the limits of economic coercion. Do not interrupt your enemy when they are making a mistake?

Second, diplomatic options include identifying the USA’s threats as another blatant breach of the UN Charter demanding consequences. Europe might stand with BRICS states defending improved global governance, ceasing decades of pandering to American defiance of international law.

Rich’s second suggestion sadly would likely require brain transplants or internal regime changes that won’t happen fast enough. Look how long it has taken Putin to get the message that Europe is not his friend and to reorient to the East. Admittedly Canada’s Mark Carney is now moving in that direction in his newly announced, wide-ranging economic pact with China, which many commentators saw as a diss to the US

From later in Rich’s discussion:

Third, security reorientation offers possibilities. This need not direct military conflict on Greenland land and waters, but restructuring European defence and foreign policy. Commentators who mock the small European military force sent to protect Greenland are missing the point. USA’s weakness is its dependence on European real estate for its global offensive military operations. For some critical matters, the USA needs the consent of the occupied, like any colonising power.

Another widely-held view is that the US has great leverage over Europe due to the intelligence it provides. Former intelligence officer Malcolm Nance, who has made an extended visit to Greenland, including meeting local officials, after Trump ramped up his campaign to take Greenland, argues that the US also depends on European-provided intel. He further contends that the logistics of an annexation would not be that easy. I wonder about the latter given the Venezuela raid.

The Nance reading is a mixed bag given that he also thinks dumping Treasuries would work, does not comprehend how weak the Article 5 NATO obligations are, and exhibits Putin/Russia derangement syndrome. But given his background and his recent fact-finding mission, we have hoisted the sections from a recent presentation that seem based on more specific knowledge and/or his recent fact-finding:

That being said, last year I spent a lot of time over 3 weeks on the ground and at sea in Greenland. I went to all of the major airports, went into the Arctic Circle to Ilulissat, took a ferry down the Greenland coast just as the ice flows were breaking up the first ferry that went from north to south in order to get a feel for all of the small fishing villages and ports that the ferry stopped in. The ferry is the only method of transportation in Greenland, in that most average Greenlanders can afford in the summer months. Aircraft are extremely expensive….

There are no connecting roads of the major towns throughout the country. None. So, you got to get there by boat or you got to get there by aircraft or, you know, in some shorter distances helicopter. That being said, the reason that I went to Greenland is as a good intelligence analyst, one, you cannot discuss a country terrain, its history, culture, people, or language without ever having been there, gone on the ground and investigated or at least studied those factors… I went there to meet government officials, people who were members of parliament, but I spent most of my time around the average Greenlander….

That being said, the only way that anyone could invade that country in the winter months, if they’re thinking about it, is to actually have to fly into one of the airports and do a forced takeover of those airports or drop airborne troops. But your soldiers will drop into inhospitable mountain terrain covered by ice with people that will not appreciate it….

Nance contends that Denmark merely invoking Article 4 (a preliminary to Article 5, there is precedent with Turkiye having done so with Greece over Cyprus) would have more ramifications than many recognize:

The problem is if Denmark ever invokes NATO article 4, there will be consequences that all of us will feel. One, insurance rates around the world will skyrocket in anticipation that invoking this means that Denmark feels that a conflict is very very possible. This is not going to be done on a whim. So many people, businesses and around the world will seek to limit their exposure particularly in merchant ships.

That’s because Denmark operates the largest merchant fleet in the world. Denmark itself may do what it’s doing now, which is call more exercises or deliberately move more forces into Greenland so that if the Donald Trump loses his mind and orders US special operations or airborne forces to jump into Greenland, they can make it very painful in deaths of US service members.

One thing that people tend to forget is that the United States is not, how can I put it? You cannot move forces magically, right? Physics, space, time, distance, all are factors. Even though you could theoretically fly from Washington DC to Nuuk, Greenland directly. Well, that’s if you know in a matter of five or you know five or 6 hours you that is if you could fly directly over Canada which is a NATO nation and we may find ourselves shut out of that.

So Denmark may move forces there in order to provide a deterrence to the United States and other NATO nations may go there in advance of a realistic threat. But Malcolm, all of that falls apart. The United States deploys special forces and airborne forces and starts seizing the airport at Nuuk, Kangerlussuaq and down at Qaqortoq which means that they have access to the top three bases. Malcolm, why won’t they just send troops all the way up to the space base in Pituffik? Because that base is 1,000 miles away from the capital of Nook. That’s how big Greenland is. So, you would actually have to fly past your objectives to get to a US base that borders Canadian airspace uh in order to bring troops there and it is not a good launching place.

Nance then argues that NATO members, above all Canada and the UK, could render the US blind by shutting off radar centers, ironically many of which are designed to protect the US from Russian attack.

Some other hardball moves:

Another thing that would happen is all intelligence relationships with the United States would cease to exist. They would shut off from all NATO nations because the United States is hostile. Human intelligence from the Central Intelligence Agency, Central Intelligence Agency officers would now be designated hostile intelligence agencies within NATO.

So they would be, you know, CIA station chiefs and other officers would either be detained or forced to leave the the 32 NATO nation countries. their assets and intelligence assets would have a very hard time communicating. Because another thing that would happen is consequence number four, US bases, US leased bases, shared relationships, landing rights, ports, seapports, airports of NATO nations would all close to the United States instantaneously.

But Malcolm, we have a 100,000 troops in NATO bases all around Europe. What would happen to them?

Well, most likely they would be encircled by the police forces of those nations and they would be told that they were going to arrange their transfer back to the United States through charter aircraft or technically they would become prisoners of their own base. This would also include US service member families who would probably be forced to get on civil airliners and fly back to the United States because a state of hostilities would exist between the US and NATO. US service members even though they may have weapons, equipment, and aircraft there will not be able to operate because they are not members of NATO. If they try, they can if aircraft try to take off without authorization like many other circumstances, they can be intercepted or attacked, forced down, or shot down.

As crazy as this sounds, you cannot just go onto a base and roll out with tanks in the middle of Europe because you don’t, one, you don’t have a lot of tanks. Two, all the fuel, water, electricity, power, and logistics comes from NATO. even whatever you have on that base is all you’re going to have. And most commanders will not do that. They will not follow orders to act as a fifth column or a military force inside a nation uh that was hosting them prior to that a few days ago. So, if the United States didn’t draw those forces down in advance of this, they’re stuck there and they could be considered prisoners of war or civilian detainees of NATO powers. It’s a fact.

Nance, a former Naval intelligence officer, returns to the chokehold that Europeans have over shipping:

And that leads to consequence number six. almost instantaneously um global shipping to the United States would end.

Now Malcolm, how can you make such a hyperbolic statement like that?

Simple. Europe runs the top six shipping companies in the world are based in Europe. And Malcolm, isn’t there something about Denmark that people should know? Why yes, there is. The number one shipping company in the world is Maersk shipping company. MSC. They are Danish and they are headquartered out of Copenhagen and they would refuse to move any shipping to the United States.

In fact, they would probably flee the United States and the Western Hemisphere for the length of time that this conflict goes on because there is an insurance risk to dealing with a country that lost its mind. and so would the other five companies and so would the number seventh company which is Chinese right people’s republic of China. The United States would find itself isolated also US equipment that is in Europe is never going back if the United States attacks Greenland because it has to be brought back by sea lift. Most of that sea lift is Danish so US forces would be put onto airliners flown back to the United States if they come to that agreement and all of that equipment would become the property of NATO or the host nation that has that base.

Nance later observes of US food comes from abroad, particularly seafood, and further adds that an option would be to close down all commercial flights to Europe.

Now admittedly Nance is a bit excited but his point hold generally, even if some of the specifics aren’t as solid as he thinks. Europe could tell Trump that they can resort to mutual assured economic destruction via shipping and flight restrictions if he does not back down over Greenland.

But of course they won’t. They seem unable to grasp that, as Michael Hudson has been describing, that the US is engaging in looting Europe. The Trump planned Greenland heist makes that undeniable. But as Aurelien has described long-form, “Europe” as in NATO and other European politics, have come to depend on the US as an organizing principle. One of the big purposes of NATO has been to keep peace in a region with a very long history of bloody fraternal relations. NATO and the EU (and remember a lot of EU activities involved the US, from treaties to financial crisis management the afore-mentioned intel sharing to standards-setting) are big career-advancing venues for elite bureaucrats and European politicians. Pulling that pole out of the tent is profoundly destabilizing, hence the intense reflexive move to keep the US in. It’s not about any Russian threat, it’s that moving forward without the US deeply involved would require massive changes that the mediocrities in charge can’t begin to work through, let alone manage.

So unless Europe gets very lucky and a Supreme Court ruling against Trump on tariffs knocks him back a bit, expect the Europeans to engage in a show of protest and then meekly try to haggle over price.
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¹ On top of the direct effect with retreating from US positions, there is a potential second-order effect, of US corporate exposure to European sales, which seems to be on the order of 10% to 15% of S%P 500 earnings. European boycotts of high profile US brands like Coca Cola have started, although by contrast, divorcing Microsoft would be a tall order for most users.