DAVOS, Switzerland, Jan 21 (Reuters) - U.S. President Donald Trump abruptly stepped back on Wednesday from threats to impose tariffs as leverage to seize Greenland, ruled out the use of force, and said a deal was in sight to end a dispute over the Danish territory that risked the deepest rupture in transatlantic relations in decades.
On a whirlwind trip to the World Economic Forum annual meeting in Davos, Switzerland, Trump backed down from weeks of rhetoric that shook the NATO alliance and risked a new global trade war.
Instead, Trump said, Western Arctic allies could forge a new deal that satisfies his desire for a "Golden Dome" missile‑defense system and access to critical minerals while blocking Russia and China's ambitions in the Arctic.
“It’s a deal that everybody’s very happy with," Trump told reporters after emerging from a meeting with NATO Secretary General Mark Rutte. “It’s a long-term deal. It’s the ultimate long-term deal. It puts everybody in a really good position, especially as it pertains to security and to minerals.”
He added: "It’s a deal that’s forever."
A NATO spokesperson said seven NATO allies in the Arctic would work together to ensure their collective security.
"Negotiations between Denmark, Greenland, and the United States will go forward aimed at ensuring that Russia and China never gain a foothold - economically or militarily - in Greenland," the spokesperson said.
RESPECT FOR DANISH SOVEREIGNTY, GREENLAND CRUCIAL: DENMARK
Trump said on his Truth Social platform that the U.S. and NATO had "formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," and that "based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st."
Denmark said the issue should be handled through private diplomacy rather than on social media.
"What is crucial for us is that we get to end this with respect for the integrity and sovereignty of the kingdom (of Denmark) and the right of the Greenlandic people to self-determination," Denmark's Foreign Minister Lars Lokke Rasmussen told public broadcaster DR.
Rasmussen said he had spoken with Rutte but declined to provide details on what had been agreed.
Greenland’s government did not reply to a request for comment.
Trump said he had tasked Vice President JD Vance, Secretary of State Marco Rubio, and special envoy Steve Witkoff to take part in further discussions.
Earlier in the day, the Republican U.S. president acknowledged financial markets' discomfort with his threats and ruled out force in a speech at the Swiss Alpine resort.
"People thought I would use force, but I don't have to use force," Trump said. "I don't want to use force. I won't use force."
The change in posture on tariffs sparked a stock market rally, with the S&P 500 index up 1.2%. That added to the market's recovery after the sharpest equities selloff in three months.
NATO allies have been unnerved by Trump's increasing threats to seize the territory from Denmark, which is a longtime U.S. NATO ally.
But in his year in office, Trump has also repeatedly made severe threats that spooked markets, only to water them down or withdraw them completely.
(Reporting by Steve Holland in Davos and Trevor Hunnicutt in Washington; Additional reporting by Dave Graham, Ariane Luthi, Dmitry Zhdannikov, Mark John, Terje Solsvik, Stine Jacobsen, Soren Jeppesen, Benoit Van Overstraeten and Tom Little; Editing by Colleen Jenkins, Toby Chopra and Rod Nickel)
