Trump Drops Europe Tariffs After Greenland Framework With NATO; Stocks Rally

President Trump said Wednesday he will not impose the tariffs he had threatened on eight European countries over Greenland, after meeting NATO Secretary General Mark Rutte at the World Economic Forum in Davos, Switzerland. U.S. stocks rallied on the news, recovering part of the previous day’s sell-off, according to CNBC and Fortune.

Trump announced the shift on Truth Social. “We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” he wrote, saying the 10 percent tariffs, which had been set to start Feb. 1, were shelved “based upon this understanding,” Fortune and CNBC reported. He later told CNBC, “we have a concept of a deal.” Neither outlet described the framework’s specific terms.

The announcement came hours after Trump walked back an earlier suggestion that he might use force to take the territory. Fortune reported that he did so during his speech at Davos, and CNBC said he stated he would not take Greenland by force. Julian Emanuel of Evercore ISI told CNBC the statement removed an “extreme volatility risk” for markets.

Trump also said talks were underway on a “Golden Dome” missile-defense initiative related to Greenland, without offering details, Fortune reported. Vice President JD Vance, Secretary of State Marco Rubio and envoy Steve Witkoff will lead negotiations and report to him, the magazine said.

Markets had been rattled Tuesday. All three major U.S. indexes had their worst day since October, CNBC reported, as investors reacted to Trump’s escalated tariff threats. Fortune called it a mass sell-off. CNBC described a “sell America” trade in which Treasury yields rose and the dollar fell.

On Wednesday the S&P 500, the Dow Jones Industrial Average and the Nasdaq each gained more than 1 percent, according to CNBC, and the small-company Russell 2000 index rose about 2 percent to a record close. Fortune reported that the S&P 500 was up 1.5 percent in afternoon trading and that long-term Treasury yields fell. Gold, a traditional refuge in times of uncertainty, had jumped on Tuesday, CNBC said.

The underlying dispute is not resolved. Trump has said anything less than control of Greenland is “unacceptable,” and Denmark reiterated that it would not give up sovereignty over the island, so it is unclear whether the outline satisfies that condition, Fortune reported.

Trade ties across the Atlantic remain strained. Fortune reported that the European Union suspended trade negotiations with the United States and the trade agreement in place since August. Kyle Handley, a scholar at the Cato Institute, told the magazine there “was never a real deal to begin with.” Whether the tariff reprieve holds will depend on the talks that Trump says the administration will now pursue.