Bessent says US-Europe relations have 'never been closer' despite Greenland crisis

DAVOS, Switzerland — U.S. Treasury Secretary Scott Bessent on Tuesday said America's relations with Europe remain strong and urged trading partners to ''take a deep breath'' and let tensions driven by the Trump administration's new tariff threats over Greenland ''play out.''

''I think our relations have never been closer,'' he said, speaking on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.

On Saturday, U.S. President Donald Trump announced a 10% import tax starting in February on goods from eight European nations that have rallied around Denmark in the wake of his stepped up calls for the United States to take over the semi-autonomous Danish territory of Greenland.

Trump has insisted the U.S. needs the territory for security reasons against possible threats from China and Russia.

Trump's threats spark diplomatic flurry across Europe

The American leader's threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union's anti-coercion instrument.

The EU has three major economic tools it could use to pressure Washington: new tariffs, suspension of the U.S.-EU trade deal, and the ''trade bazooka'' — the unofficial term for the bloc's Anti-Coercion Instrument, which could sanction individuals or institutions found to be putting undue pressure on the EU.

France's Macron suggests G-7 meeting in Paris this week

Trump also posted a text message from Emmanuel Macron in which the French president suggested a meeting of members of the Group of Seven industrialized democracies in Paris after the Davos gathering.

Later, however, Trump posted some provocatively doctored images. One showed him planting the U.S. flag next to a sign reading ''Greenland, U.S. Territory, Est. 2026.'' The other showed Trump in the Oval Office next to a map that showed Greenland and Canada covered with the U.S. Stars and Stripes.

In a sign of how tensions have increased in recent days, thousands of Greenlanders marched over the weekend in protest of any effort to take over their island. Greenland Prime Minister Jens-Frederik Nielsen said in a Facebook post Monday that the tariff threats would not change their stance.

''We will not be pressured,'' he wrote.

European markets open sharply lower

European markets opened sharply lower on Tuesday and U.S. futures fell further as tensions rose over Greenland. Benchmarks in Germany, France and Britain fell about 1%. The future for the S&P 500 lost 1.5% and the Dow future was down 1.4%.

With U.S. trading closed Monday for a holiday, financial markets had a relatively muted response to Trump's threat to put a 10% extra tariff on exports from eight European countries that have opposed his push to exert control over Greenland. Jonas Golterman of Capital Economics described the situation as a lose-lose one for both the U.S. and the targets of Trump's anger. He said, ''It certainly fells like the kind of situation that could get worse before it gets better.''

UK replies to Trump's Chagos Islands criticism

In another sign of tension between allies, the British government on Tuesday defended its decision to hand sovereignty of the Chagos Islands to Mauritius after Trump attacked the plan, which his administration previously supported.

The United Kingdom signed a deal in May to give Mauritius sovereignty over the islands, though the U.K. will lease back the island of Diego Garcia, where the U.S. base is located, for at least 99 years.

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