The European Union is prepared to respond if President-elect Donald Trump attempts to use tariffs as leverage to pressure Denmark into selling Greenland.
During a press conference last week, Trump argued that the U.S. needs Greenland "for national security purposes" and suggested that Denmark may not have any legal right to the territory. He further claimed that if Denmark does have rights to Greenland, it should relinquish them, emphasizing that the U.S. requires it for national security. Trump also proposed imposing "very high" tariffs on Denmark if the country refused to sell Greenland, which is an autonomous territory in the Arctic.
Should Trump pursue tariffs against Denmark, enforcing them could be complicated. In response to China’s efforts to pressure Lithuania over its Taiwan policy, the EU created a mechanism to address economic coercion. China had condemned Lithuania's decision to allow the name "Taiwan" at its Representative Office in Vilnius, leading to economic retaliation, including removal of Lithuania from China’s customs system and informal sanctions on companies working with Lithuania.
These actions led to the creation of the Anti-Coercion Instrument (ACI) by the European Commission. The ACI is designed to protect the EU’s interests by enabling it to respond to economic coercion. While foreign powers may target individual EU member states, the EU as a whole could step in to defend Denmark, making any tariffs directed solely at Denmark a de facto challenge to the EU itself.
The ACI offers a range of countermeasures against coercive actions, such as imposing tariffs, restricting trade in services and intellectual property, and limiting access to foreign investment and public procurement. The framework also includes provisions for stakeholders affected by coercion to engage with the EU Commission and for the EU to request reparations from the offending country.
If tariffs fail to achieve their intended results—much like analysts argue U.S. tariffs against China did under Trump’s first administration—it could have unintended consequences. For example, Lithuania's resistance to Chinese pressure only strengthened its ties with Taiwan and the semiconductor market, which in turn harmed China, as it could no longer access vital components from Lithuania. Analysts from the Center for Strategic and International Studies (CSIS) contend that China's coercive tactics have not only failed to achieve policy goals but have also damaged its global image.
Olof Gill, spokesperson for the European Commission, emphasized the EU’s readiness to defend its interests: "If necessary, the EU stands ready to defend its legitimate interests. The EU is committed to maintaining the closest possible partnership with the U.S.," he said. He highlighted the importance of transatlantic cooperation for security and economic growth, with the EU and U.S. being key trade partners supporting millions of jobs globally.
Danish Foreign Minister Lars Lokke Rasmussen responded to Trump’s remarks, saying that Greenland has its own aspirations, and if independence becomes a reality, it would not seek to become part of the U.S. "We are open to a dialogue with the Americans on how we can possibly cooperate even more closely," he added.
Trump’s ability to act on Greenland or Denmark will not come into play until after his inauguration on January 20, when he assumes office and begins appointing his Cabinet. Following this, he would direct his new secretaries of commerce and state to evaluate the feasibility and implications of implementing tariffs.
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