After days of uncertainty, US President Donald Trump has said that he will not impose new tariffs on eight European nations, including the UK, over his contentious claims for US control of Greenland.
“The framework of a future deal” regarding security arrangements around the semi-autonomous Danish territory has, he claims, been agreed. The details of this agreement are currently vague but should allow for a thaw in increasingly strained transatlantic relations, at least for a few days.
Global Trade Today brings you the key details from what’s turning out to be a busy few days for the US president at Davos, as well as customs news in Europe and the UK.
Trump rolls back European tariff threats
Trump has said that he won’t impose a threatened 10% tariff hike on eight European nations over Greenland, which he had previously said would come into force on 1 February. He had also threatened a further 25% rate from 1 June.
He said he had held a “very productive” meeting with Nato secretary general Mark Rutte at Davos yesterday, and that a “framework for a deal” had been agreed.
“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1,” the president said.
He did not give any details about the deal, telling CNBC that “it’s a little bit complex, but we’ll explain it down the line”. He did say, however, that the agreement will be “for ever”.
A Nato spokesperson, Allison Hart, told the Guardian that discussions around a framework had focused on “ensuring Arctic security through the collective efforts of allies, especially the seven Arctic allies”.
“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.”
‘Europe not going in the right direction’
Trump’s announcement of the ‘framework’ came just hours after a wide-ranging address at the World Economic Forum’s annual conference in Davos, in which he said: “We want a piece of ice for world protection, and they won’t give it… We’ve never asked for anything else.”
During his speech, he was disparaging about European countries, particularly what he decried as being a tendency towards “increasing government spending, unchecked mass migration and endless foreign imports”.
“I love Europe and I want to see Europe go good, but it’s not heading in the right direction,” he said, while also calling efforts to increase energy generated from renewable sources a “green new scam”.
Europe pauses US deal
Ahead of Trump’s speech, the European Parliament had suspended approval of a trade deal that the EU secured with the US last year.
The deal, if approved, would see US duties on most EU exports set at 15%, down from the 30% ‘reciprocal’ rate set on Trump’s ‘Liberation Day’ in April 2025, with Europe agreeing investments into the US and rule changes to support more US exports into the continent in return.
In the days following Trump’s most recent tariff threats, European leaders also discussed unleashing the EU’s so-called ‘trade bazooka’ on the US – a package of retaliatory measures including hiked EU tariffs on major US exports.
Speaking since Trump’s Greenland ‘framework’ announcement, Bernd Lange, chair of the European Parliament's International Trade Committee, declined to tell the BBC whether the EU-US deal could be salvaged. He said that it will take “some time” to understand what the implications of the deal will be, saying "we have to look [at] what this so-called solution would mean”.
Zelenskyy meeting and peace board unveiled
Regarding security at the other end of Europe, Trump is set to meet with Ukrainian president Volodymyr Zelenskyy at Davos today (22 January) in a bid to end what he called the “bloodbath” taking place in Ukraine in its war with Russia.
This meeting follows the announcement of a new ‘Board of Peace’ that is being launched by Trump to mediate on international conflicts, which will have an initial focus on Israel-Palestine. Western European countries have declined offers to join the board, raising concerns over the possible inclusion of Russian president Vladimir Putin.
Trump unveiled the new initiative at Davos this morning, alongside representatives from Bahrain, Morocco, Argentina, Armenia, Azerbaijan, Bulgaria, Hungary, Indonesia, Jordan, Kazakhstan, Kosovo, Pakistan, Paraguay, Qatar, Saudi Arabia, Turkey, UAE, Uzbekistan and Mongolia, the FT reports.
WCO confirms HS 2028 amendments to go ahead
Away from Davos, the World Customs Organization (WCO) announced yesterday that “HS 2028 amendments have now been accepted, marking a major milestone in the evolution of the Harmonized System”.
The Harmonized System (HS) is used by customs authorities globally to classify goods for cross-border trade, with thousands of products given standardised codes for use in customs procedures.
The WCO confirmed that, from January 2028, there will be 299 sets of amendments, resulting in “a nomenclature of 1,229 headings and 5,852 subheadings”.
Changes will include new subheadings for “essential supplies used in health emergencies” including personal protective equipment (PPE) and diagnostic devices – which it describes as a response to “lessons learned from recent global health devices”.
“Environmental protection [also] features prominently in HS 2028,” the WCO said, with new classifications of plastic waste and single-use products.
We will go into further depth on these changes in our next edition of ‘Customs Corner’.
UK firms demand ‘border control posts’ reimbursement
Dozens of firms importing plants and fresh produce from the EU have repeated calls for the government to reimburse the millions of pounds they have invested in establishing ‘border control points’ to navigate post-Brexit sanitary and phytosanitary (SPS) checks.
The SPS controls in question could be reduced or removed should the UK and EU complete negotiations for a new ‘Common SPS Area’ to remove trade friction in the sector – a key outcome of last year’s ‘reset’ of their post-Brexit relationship.
“In good faith, the industry proactively responded to the requests of government; and now it’s been hung out to dry, costing modest family businesses huge amounts of money,” Nigel Jenney, CEO of the Fresh Produce Consortium, told Politico.
Also today in trade
· European auto firms are refusing to back new EU ‘made in Europe’ policies, the FT reports
· Business and trade secretary Peter Kyle appeared to contradict his claims from earlier this week when telling CNBC yesterday that “it would be crazy not to engage with the prospect of a customs union”, also in the FT
· The World Economic Forum is considering moving its much-discussed annual conference away from Davos, Switzerland, to a new location
Yesterday in trade
· The Business and Trade Committee warned that government cuts to export support staff could dilute any economic boost from the forthcoming UK-India free trade agreement
· British prime minister Sir Keir Starmer confirmed he will be visiting China next week
· The EU announced plans to phase out equipment produced by Huawei and other Chinese companies as part of a new drive on cybersecurity
You can read yesterday’s trade news here.
