NATO Nations Warn Donald Trump's New Tariff Plan Risks 'Dangerous Downward Spiral'

In a stunning escalation that threatens the very foundation of the transatlantic alliance, President Donald Trump has levelled an extraordinary economic ultimatum at eight NATO allies: accept American acquisition of Greenland or face punishing tariffs beginning 1 February. The move is without precedent in NATO's 77-year history—a founding member using trade weapons against fellow alliance members to coerce territorial acquisition from another member state.

Eight nations, including France, Germany, and the United Kingdom, have issued a joint statement warning that Trump's ultimatum 'risks a dangerous downward spiral' in transatlantic relations whilst reaffirming their commitment to the principles of sovereignty and territorial integrity that form NATO's legal and moral foundation.

Trump announced the tariff threat via Truth Social on Saturday, declaring a 10 per cent import tax on all goods from Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the United Kingdom, effective 1 February. The tariffs will escalate to 25 per cent on 1 June unless, as Trump phrased it, a 'complete and total purchase of Greenland' is finalised.

The announcement represented a dramatic intensification of rhetoric that has simmered since Trump's initial public interest in acquiring the semi-autonomous Danish territory in January 2025.

Trump's justification rested upon two pillars: first, Greenland's purported strategic importance to American defence, particularly its role in a proposed 'Golden Dome' missile defence system; second, his claim that the United States has 'subsidised' Denmark and the European Union for decades without receiving adequate compensation.

The tariffs, he suggested, constitute retaliation against Denmark and allies who have recently deployed token military forces to Greenland in a NATO exercise.

Yet the joint NATO response, issued in the early hours of Sunday morning, cut through Trump's framing with crystalline clarity. The eight nations declared themselves 'in full solidarity with the Kingdom of Denmark and the people of Greenland', emphasising that they 'stand firmly' behind 'the principles of sovereignty and territorial integrity.'

They stressed their readiness to engage in dialogue, described their Arctic deployments as posing 'no threat to anyone', and reasserted their commitment to strengthening 'Arctic security as a shared transatlantic interest'.

Trump's Greenland Tariff: How Economic Coercion Threatens NATO's Legal Framework

The statement's carefully chosen language obscures a profound strategic crisis. NATO's entire architecture rests upon Article 5 of its founding treaty: an attack on one member constitutes an attack upon all. This collective-defence guarantee has deterred Russian expansion for seven decades.

Yet the guarantee becomes meaningless if NATO's dominant military power can simultaneously threaten fellow members. One anonymous NATO official, speaking to journalists, declined to engage with hypotheticals, yet the subtext was unmistakable: NATO has no answer to a member threatening other members.

The timing is particularly damaging. Only months ago, Trump persuaded NATO allies to commit to increased defence spending, arguing that burden-sharing would strengthen the alliance. European nations agreed, with all but Spain committing to match American per capita defence investment within a decade.

Now, having secured those commitments, Trump threatens economic retaliation against those same allies for defending their own territory through routine military exercises.

Trump's Greenland Tariff Gamble: Why European Nations Fear 'A Dangerous Downward Spiral'

European business leaders have warned of the consequences. Britain's manufacturing sector, deeply integrated with American supply chains, faces disruptions costing hundreds of millions of pounds. The Confederation of British Industry noted that 'additional tariffs will benefit no one and could seriously undermine the relationship'.

Italy's Prime Minister Giorgia Meloni, having spoken directly with Trump, emphasised there had been 'a problem of understanding and communication', suggesting she views the ultimatum as bluster rather than settled policy. The Netherlands' Foreign Minister was less diplomatic, describing the threat as 'blackmail'.

What remains unclear is whether Trump genuinely intends these tariffs or whether they represent negotiating leverage. Yet the ambiguity itself is damaging. NATO's strength depends upon predictability and mutual commitment. An American president who threatens economic warfare against allies over territorial acquisition introduces precisely the kind of unpredictability that erodes alliance cohesion.