By Steve Holland, Stine Jacobsen and Janis Laizans
DAVOS, Switzerland/COPENHAGEN/NUUK, Jan 22 (Reuters) - U.S. President Donald Trump's abrupt climbdown on using tariffs as a weapon to seize Greenland brought relief on Thursday, but left uncertainty on ending a standoff that has risked the deepest rupture in transatlantic ties in decades.
After weeks of threats, Trump stepped back from the threat of imposing tariffs on countries opposing his plans and ruled out using force, suggesting instead that
a framework deal over the Arctic island was in sight.
Trump's ambition to wrest sovereignty over Greenland from fellow NATO member Denmark has threatened to blow apart the alliance that underpinned Western security since the end of World War Two, and reignite a trade war with Europe.
After meeting with NATO Secretary General Mark Rutte, Trump said there could be a deal that satisfies his desire for a missile‑defense system and access to critical minerals while blocking what he says are Russia and China's ambitions in the Arctic.
European shares rebounded. But the exact nature of any deal was not immediately clear and Rutte, who met Trump at the World Economic Forum in Davos, Switzerland, said they had not discussed whether Greenland would remain in Danish hands.
He told a panel on Thursday they had discussed how NATO should best defend the Arctic against Russia and China.
"One workstream coming out of yesterday ... is to make sure when it comes to Greenland, particularly, that we ensure that the Chinese and the Russians will not gain access to the Greenland economy (or) militarily to Greenland," Rutte said.
RELIEF BUT CAUTION ABOUT PREMATURE OPTIMISM
Danish Prime Minister Mette Frederiksen said Denmark and Greenland would continue to engage in constructive talks, provided there was respect for her country's territorial integrity.
Her Defence Minister Troels Lund Poulsen later said Denmark has established a clear red line in discussions over Greenland, stating the country will not cede sovereignty.
"Following Wednesday's meeting between NATO Secretary General Mark Rutte and Donald Trump, we are in a much better place today than we were yesterday," he said on X. "I am very happy about that."
Germany's Vice Chancellor Lars Klingbeil, however, cautioned against premature optimism about the issue being solved.
"It's good that they are engaged in dialogue, but we have to wait a bit and not get our hopes up too soon," Klingbeil told Germany's ZDF television on Wednesday evening.
That echoed feelings among some residents in the Greenland capital, Nuuk.
"I'm very thrilled to hear that, first of all, because he has been saying a lot of stuff about taking Greenland with force, like he'll do it the hard way, which is so scary to hear," said Ivi Luna Olsen, a tour guide. "But I'm also like keeping my hopes down and still, like, hoping for the best and preparing for the worst because sometimes he can be saying a lot of stuff."
Addressing the issue for the first time in public, President Vladimir Putin said on Wednesday that Greenland's ownership was not Russia's concern.
China's foreign ministry said on Thursday that "the so-called China threat" to Greenland was groundless.
GERMAN LEADER SAYS DON'T GIVE UP ON NATO
Trump's push to seize Greenland has threatened to reignite a trade war with Europe that rattled markets and companies last year and prompted the European Union to threaten retaliation.
The pan-European STOXX 600 .STOXX climbed 1% by 0802 GMT, regaining some poise after a revival of trade war jitters shaved 1.9% off the benchmark index this week through Wednesday.
There has also been concern that the Greenland issue could cause a dramatic rift in NATO just as Ukraine and its allies needed the U.S., NATO's most powerful member, onside to end the war with Russia.
President Volodymyr Zelenskiy is due to meet Trump in Davos on Thursday, leaving behind an energy crisis in Ukraine, where Russian airstrikes against electricity infrastructure have left swathes of the capital and other regions without power.
Also speaking in Davos, German Chancellor Friedrich Merz welcomed Trump's move, saying countries should not give up on NATO.
"Despite all the frustration and anger of recent months, let us not be too quick to write off the transatlantic partnership," he added.
(Reporting by Steve Holland, Trevor Hunnicutt, Alessandro Parodi, Benoit Van Overstraeten, Stine Jacobsen, Markus Wacket, Sarah Marsh, Madeline Chambers; writing by Matthias Williams; Editing by Sharon Singleton)
