US Warns EU Against Using Tariff ‘Bazooka’ in Greenland Dispute

The Chronify

January 21, 2026

Washington has urged European leaders to avoid escalating the Greenland standoff through retaliatory tariffs, warning that such moves could unravel last year’s transatlantic trade deal. The warning comes as EU leaders debate invoking their powerful anti-coercion instrument in response to threats by Donald Trump.

The United States has cautioned the European Union against deploying its strongest trade retaliation tools amid the growing dispute over Greenland, saying such action would be “not wise” and could have serious consequences for transatlantic relations.

US Trade Representative Jamieson Greer issued the warning while speaking to journalists on the sidelines of the World Economic Forum in Davos on Tuesday. His comments came after Emmanuel Macron urged the EU to consider using its Anti-Coercion Instrument (ACI) following Trump’s threat to impose tariffs of up to 25 percent on eight European countries if the US is blocked from acquiring Greenland.

“Every country is going to do what’s in its national interests, and those have natural consequences,” Greer said. He added that activating the ACI, which the EU has never used before, “would not be wise,” echoing similar remarks made earlier by US Treasury Secretary Scott Bessent.

The ACI is designed to deter countries from exerting political or economic pressure on the EU, but opinions within the bloc remain divided. While some officials are calling for dialogue to de-escalate the crisis that has dominated discussions in Davos, others insist Europe must respond firmly to what they describe as “blackmail” over the autonomous Danish territory.

Asked how Washington would respond if the EU declares Greenland “non-negotiable,” Greer said bluntly, “If that’s the case, then so be it,” adding that countries that ignore US advice often see “crazy things happen.”

Separately, US Commerce Secretary Howard Lutnick urged European governments to keep tensions low, warning that retaliatory tariffs could undermine the trade deal reached with the Trump administration last July. That agreement capped US tariffs on most EU goods at 15 percent, while the UK secured a lower 10 percent ceiling.

Greer also signaled a broader shift in US trade policy, saying partners should not assume permanent access to the American market. “There’s always going to be a little bit of uncertainty,” he said, stressing that trade openness will be continually reassessed under the Trump administration.