The Latest: Trump says a Greenland deal 'framework' is reached and cancels tariff threat

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DAVOS, Switzerland (AP) — U.S. President Donald Trump said Wednesday he is dropping his threat to impose tariffs on several European countries, citing what he described as a new framework with NATO on Arctic security. The abrupt about-face comes shortly after he told the World Economic Forum in Davos that the U.S. would not use force to pursue control of Greenland.

In his earlier speech, Trump reaffirmed his ambition to secure “right, title and ownership” of Greenland and urged NATO allies not to stand in the way, warning that refusals would carry consequences for the alliance.

Trump's address at the annual meeting of the elite in Switzerland tried to focus on his efforts to tame inflation and spur the economy back home. But his more than 70-minute address focused more on his gripes with other countries.

European Commission President Ursula von der Leyen on Tuesday called Trump’s planned new tariffs on eight EU countries over Greenland a “mistake” and questioned Trump’s trustworthiness. French President Emmanuel Macron said the EU could retaliate by deploying one of its most powerful economic tools, known colloquially as a trade “bazooka.”

Here is the latest:

It’s not the first time Trump has threatened tariffs, only to back away.

In April, after first saying he would slap massive tariffs on nations from around the world — prompting a sharp negative market reaction — Trump eased off. He bristled at suggestions he had chickened out, saying, “It’s called negotiation.”

Trump also moderated what had been aggressive posturing on Greenland on Wednesday when he said he wouldn’t take the territory by force. The U.S. stock market is steadying following those remarks.

Trump says he and NATO Secretary General Mark Rutte agreed to “the framework of a future deal” on Greenland and the Arctic region that will take his Feb. 1 threat of tariffs off the table.

The announcement on his Truth Social platform came soon after he said in a speech at the World Economic Forum in Davos that he was backing off his threat of using military force to seize the Danish territory, which he says is crucial to U.S. national security.

Trump said further discussions are being held related to Greenland and his plans for a “Golden Dome” to protect the United States from long-range missiles. He added that further information will be available as discussions continue.

Trump declined to name a reasonable price for the United States to buy Greenland during a meeting in Davos with the NATO secretary general.

“There’s a bigger price, and that’s the price of safety and security and national security and international security having to do with many of your countries,” Trump responded when asked by The Associated Press how he would calculate a reasonable offer for the strategic land mass. “That’s really the price. It’s a big price.”

Trump responded ambiguously when asked to elaborate on his earlier comment that “we will remember” if Denmark refuses to sell Greenland to the U.S.

“You’ll have to figure that out for yourself,” he told a reporter.

The NATO leader said he tells the organization’s members that Trump is “completely committed” but has “one irritant” that Europeans were not paying the same amount for their defense as the U.S. was.

“We solved it and this is crucial also because we need the money to protect ourselves,” Mark Rutte, secretary general of NATO, said at Davos.

Mark Rutte, secretary general of NATO, sought to shore up Trump’s confidence that his allies would stand with him in a crisis.

He also reminded Trump that NATO allies went to Afghanistan to fight on America’s behalf after the 9/11 attacks – and some soldiers never came home.

“You can be assured, absolutely, if ever U.S. will be under attack, your allies will be with you,” Rutte told Trump.

Trump said he appreciated the compliment and hoped it was true.

“I mean, he’s a good man, he’s never lied to me before,” Trump said of Rutte in response to a reporter’s question. “I just, you know, when I see what’s happening with Greenland, I wonder.”

After a reporter asked Trump about Danish leaders’ rejection of his comments about acquiring Greenland, the U.S. president said “I don’t like getting it secondhand.”

In a speech at Davos earlier Wednesday, Trump insisted that he wants to “get Greenland, including right, title and ownership,” but said he would not use force to do so.

A Danish government official told The Associated Press afterward that Copenhagen is ready to discuss U.S. security concerns in the Arctic. But the official, who was not authorized to comment publicly and spoke on condition of anonymity, underscored the government’s position that “red lines” — namely Denmark’s sovereignty — must be respected.

The reporter’s question came as Trump sat down for a bilateral conversation with Mark Rutte, secretary general of NATO.

President Ilham Aliyev of Azerbaijan hailed an “excellent speech” and recalled how he has credited Trump for helping Azerbaijan to find peace with Armenia, its neighbor in the Caucasus.

He also said Azerbaijan will be part of Trump’s Board of Peace, “because we think that President Trump is a person who you can trust, and we are trusting him, and we will be part of the Board of Peace.”

Asked about Trump’s prospects of helping wrest peace in Ukraine, Aliyev said: “He fixed our case, but unfortunately, still he has to work on that.”

President Donald Trump arrives to address a meeting of Global Business Leaders at the Annual Meeting of the World Economic Forum in Davos, Switzerland, Wednesday, Jan. 21, 2026. (AP Photo/Evan Vucci)

Trump told a room of business executives they’ve gotten a lot richer during his first year back in office.

The president spoke to a wealthy audience at the Davos economic forum in Switzerland as Republicans back home press him to focus on affordability, a top concern for Americans getting squeezed by higher prices ahead of the midterm elections.

“I don’t even ask anybody how you’re doing now,” Trump said of his conversations with business executives. “It’s like everybody is making so much money.”

Even his enemies are doing well, he added.

“A couple of people in the room, I can’t stand them. And they’ve become very rich. There’s nothing I can do about it,” Trump said to laughs.

Ebba Busch, the deputy prime minister of Sweden, said she heard “a mix of irrational and rational arguments at the same time” from Trump.

“Europe needs to toughen up. We need to hold the line,” she told reporters in Davos. “We will not be bullied or blackmailed to letting go of territory that is, in this case, Greenland’s and Denmark’s.”

Republican House Speaker Mike Johnson said Trump’s tariffs policies have been working, bringing trillions of dollars into the U.S. during the president’s first year.

“I have no intention of getting in the way of President Trump and his administration, and how they’ve been using this very effectively,” Johnson said at the Capitol.

But a top Democrat, Rep. Ted Lieu of California, said the costs of tariffs are being passed on to American households.

“This is how ludicrous Donald Trump’s idea is,” Lieu said at a press Capitol conference. “He’s saying ‘If I don’t get my way on Greenland, I’m going to punish the American people even more.’”

“How dumb is that?” Lieu said. “We’re asking the president: Focus on America, not on Venezuela or Greenland.”

U.S. Sen. Lindsay Graham, a Republican from South Carolina, said Trump made a strong case Wednesday for acquiring Greenland legally.

“Taking Greenland by force is off the table, it was never a good idea,” Graham said, adding, “He’s convinced me.”

He emphasized that any deal involving Greenland must be approved by the Senate, which would not support using force.

Graham expressed his willingness to support a legal purchase of Greenland and said he aims to be “Trump’s biggest champion” in bringing Greenland under American control, which he argued would be for the benefit of NATO.

Following Trump explicitly saying in his Davos remarks that he wasn’t considering military action to take Greenland, a Danish government official said Copenhagen remains ready to discuss how to go about addressing U.S. security concerns in the Arctic.

But the official, who was not authorized to comment publicly and spoke on condition of anonymity, underscored the government’s position that “red lines” — namely Denmark’s sovereignty — must be respected.

President Emmanuel Macron’s office is disputing Trump’s assertion in Davos that he successfully pressured the French leader to increase prescription drug prices.

“It’s being claimed that President @EmmanuelMacron increased the price of medicines. He does not set their prices. They are regulated by the social security system and have, in fact, remained stable,” Macron’s office said in a post on X. “Anyone who has set foot in a French pharmacy knows this.”

It included a GIF of Trump speaking overlaid with the words, “FAKE NEWS!”

The president said while in a meeting with the Egyptian president that there will be “a lot” of countries represented on his Board of Peace.

“Some need parliamentary approval but for the most part, everybody wants to be on,” he said.

Gavin Newsom, Governor of California, talks to the media after the speech of President Donald Trump during the Annual Meeting of the World Economic Forum in Davos, Switzerland, Wednesday, Jan. 21, 2026. (AP Photo/Markus Schreiber)

“And there was boorish parts of it, but those were not even that consequential, including name-checking people he likes and people he didn’t like,” Gov. Gavin Newsom said. “Honestly, I was just a little disappointed.”

The Democratic governor, a frequent critic of Trump who’s eying a 2028 presidential run, has made himself available repeatedly to media this week in Davos.

“For a European audience, that may have been a new speech. My God, there wasn’t anything new about that speech for the American audience,” he said.

Referring to Trump’s comment that he won’t use military force to wrest Greenland for the United States: “I don’t think military force was ever real.”

Trump’s top adviser on artificial intelligence, David Sacks, told a Davos crowd that “child safety has to be part of a larger regulatory framework” for AI but he warned against overregulating the technology.

Sacks acknowledged “horror stories” of AI chatbots that he says contributed to children harming themselves. But he also said billions of people, including many teenagers, are using AI without problems and it is “less addictive, more a utility,” when compared to social media.

“There’s been a little bit of a transference of the concerns that people have about social media onto AI and some of that transference is justified and some of it may not be,” Sacks said in a conversation with Salesforce CEO Marc Benioff.

Sacks called efforts across the 50 U.S. state governments to regulate AI a “little bit of a knee-jerk reaction” and one of the “great threats to innovation in the United States right now.”

The CEOs of Visa, Cisco, Salesforce, JPMorgan Chase and Amazon are among the high-profile figures gathering outside Trump’s upcoming Davos event with global business leaders.

Sports will also be represented there, with Baltimore Orioles owner David Rubenstein and FIFA president Gianni Infantino spotted among the expanding group.

While the spotlight is on Trump, some of the world’s most pressing issues are also being debated at Davos, including the war in Sudan, now approaching its third year.

During a panel discussion Wednesday, humanitarian groups pushed for stronger international engagement to end the fighting as well as more aid to civilians.

International Rescue Committee President and CEO David Miliband called the crisis in Sudan an “avatar for the world disorder.” He said the conflict has been internationalized — several outside powers reportedly arm and finance the warring sides — and said civilian deaths outnumber fighters killed.

Hanin Ahmed, head of the local aid initiative Emergency Response Rooms of Sudan, said the humanitarian situation is deteriorating across the country, including in areas not controlled by the Rapid Support Forces, citing food insecurity, lack of income due to prolonged job losses, and disease outbreaks.

The U.S. stock market is bouncing back from its worst day since October, although some signs of fear remain on Wall Street about Trump’s desire to take Greenland.

The S&P 500 climbed 0.7% on Wednesday after Trump said in his speech that he would not use force to take “the piece of ice.” The potential de-escalation in rhetoric around Greenland helped the index recover some of its 2.1% drop from the day before and pull closer to its all-time high set earlier this month.

The Dow Jones Industrial Average was up 353 points, or 0.7%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.7% higher.

Treasury yields also held steadier in the bond market, a day after jumping in a potential signal of worries about higher inflation in the long term. They got help from a calming of government bond yields in Japan. The value of the U.S. dollar was also mixed against the euro, Swiss franc and other currencies after sliding the day before.

But some nerves seemed to remain in the market, and the price of gold rose another 2.1% and topped $4,800 per ounce for the first time.

▶ Read more about Wall Street’s reaction to Trump’s speech

White House press secretary Karoline Leavitt said after those individual meetings, which was expected to occur behind closed doors, the president will address business leaders. He will then meet with NATO Secretary General Mark Rutte.

Danish Foreign Minister Lars Løkke Rasmussen was in a meeting on Ukraine and didn’t hear Trump’s speech, but says he has been briefed on it.

He said in Copenhagen that it’s clear Trump’s intentions toward Greenland remain “intact,” Danish public broadcaster DR reported.

Of Trump’s statement that he won’t use force to acquire the island, Løkke Rasmussen said: “That is positive in isolation, but it doesn’t make the problem go away.”

Trump told Swiss President Guy Parmelin that his country was “great” and “beautiful.”

“You do make great watches, too,” he said during a brief part of the meeting that was open to the media.

Trump also clarified that he’s meeting with Ukrainian President Volodymyr Zelenskyy on Thursday, not Wednesday, as he said during his address.

Zelenskyy was in Kyiv on Wednesday, his communications adviser Dmytro Lytvyn said.

Trump returned to the White House a year ago. He marked Tuesday’s anniversary by presiding over a meandering, nearly two-hour-long press briefing to recount his accomplishments, repeating many false claims he made throughout 2025.

▶ Read the AP’s latest Fact Focus

Asked about U.S. debt climbing toward $40 trillion — more than the size of the annual U.S. economy — Trump insisted that he can solve the problem with economic growth and eliminating fraud and excessive spending.

“I think we’re going to be paying off debt,” he boasted.

Trump made similar promises when he first ran for president in 2016 and again in 2024. He has added more to U.S. debt totals than any president.

He repeated claims about fraud in Minnesota, mentioning the figure $19 billion — a miniscule fraction of annual federal spending that is measured in trillions. Trump also said the U.S. is cutting spending, although he has exaggerated the effects of his government efficiency efforts.

He gave them until Jan. 20 to comply with his demand.

It was unclear how Trump could unilaterally cap credit card interest rates. White House Press Secretary Karoline Leavitt said previously that the president has “an expectation” that credit card companies will accede to his demand that they cap interest rates on credit cards at 10%.

There are a handful of bills introduced by Republicans and Democrats to cap credit card interest rates, but House Speaker Mike Johnson has been cold to the idea.

Banks are highly resistant to the idea of capping credit card rates. In an interview at Davos, JPMorgan’s Jamie Dimon said “it would be a disaster to the U.S. economy” to cap credit card rates, saying banks would close millions of credit card accounts in response.

It’s the first time he’s asked Congress to act on an issue that he demanded banks comply with only a couple weeks ago.

“Whatever happened to usury?” Trump said in his speech at the World Economic Forum in Davos, Switzerland.

Usury refers to the biblical prohibition to charge unreasonable interest on loans, and many states and countries had usury laws on the books up until the first half of the 20th Century.

Leaving vague exactly what kind of “culture” that he meant, Trump said the West has prospered because of a shared and “very special” one.

“This is the precious inheritance that America and Europe have in common,” Trump said. “We share it. But we have to keep it strong.”

Trump added that he wanted to “defend that culture” and “rediscover the spirit that lifted the West from the depths of the dark ages to the pinnacle of human achievement.”

Many Americans descend from Europeans, including settlers who came to the North American continent hundreds of years ago. But the Trump administration also has faced criticism at times for focusing on that side of U.S. culture when the country’s population is far more diverse.

“But equally importantly, we’re cracking down on more than $19 billion in fraud that was stolen by Somalian bandits,” Trump said, referring to ongoing fraud investigations in Minnesota that have focused on members of the diaspora. “Can you believe that— Somalia? They turned out to be higher IQ than we thought.”

It’s not the first time Trump has gone after the community in racist terms.

Last month, Trump said he did not want Somali immigrants in the U.S., saying residents of the war-ravaged eastern African country are too reliant on the U.S. social safety net and add little to the United States.

Somalis have been coming to Minnesota and other states, often as refugees, since the 1990s. The president made no distinction between citizens and noncitizens.

Talking about the U.S. market, Trump threw a curveball, saying essentially that he didn’t want to simply expand housing supply because it could lower values for people who already own homes.

“If I want to really crush the housing market, I could do that so fast,” he said. But, “I don’t want to do anything to hurt” people who have built wealth through their home equity.

“I don’t want to do anything to hurt” existing homeowners, Trump said. He instead emphasized his desire to see lower interest rates, though that is a policy that, over time, would drive home prices up because it fuels demand.

It is the first time Trump has ruled out using force, having previously been vague about how far he is willing to go in his push.

The president said the U.S. “probably won’t get anything” unless he decided to “use excessive strength and force” that he said would make the U.S. “frankly unstoppable.”

“But I won’t do that. Okay?” Trump said.

He added a minute later: “I don’t have to use force. I don’t want to use force. I won’t use force.”

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AP World Economic Forum: https://apnews.com/hub/world-economic-forum