Nato chief and Donald Trump discussed revamp of US-Denmark military deal

A promise to renegotiate a US-Denmark pact that governs American military bases in Greenland was at the core of discussions between Donald Trump and Nato’s secretary-general that led the US president to dial back his threats over the Arctic island.

The shift led to a rebound in global markets and helped ease some European fears that the crisis could rupture the transatlantic relationship.

Nato head Mark Rutte and Trump discussed reopening the 1951 pact to strengthen US deployments on the vast Danish territory during their talks on Wednesday, four people briefed on the situation said.

The US president said on Thursday that Greenland could be part of his planned Golden Dome missile defence system for North America.

Rutte and Trump also discussed initiatives to increase US investment in Greenland — which has one of the biggest untapped reserves of minerals in the world — and block Chinese and Russian activity on the vast island, the people said.

Western officials cautioned that the compromise reached by Trump and Rutte on the margins of the World Economic Forum in Davos was just an initial agreement to continue negotiations to de-escalate tensions between Washington and its European allies.

Danish Prime Minister Mette Frederiksen said on Thursday that Copenhagen stood ready to renegotiate the 1951 agreement — provided that its sovereignty was not called into question. She also emphasised on Thursday that Rutte was not negotiating on her country’s behalf.

But the Nato chief kept European allies in the loop in the run-up to the talks, speaking regularly with Frederiksen and calling German Chancellor Friedrich Merz three times on Saturday alone.

Trump emerged from the meeting with Rutte on Wednesday night saying he would drop his threat to impose tariffs on eight European allies he claimed were trying to thwart his desired annexation of Greenland.

Frederiksen said she wanted “a constructive dialogue with allies” on improving Arctic security, including Trump’s Golden Dome plan, “providing that it is done with respect for our territorial integrity”.

She added that Nato members agreed that the alliance should have a “permanent presence” in Greenland and the Arctic region.

Trump said on Thursday that the “details” of a deal were “really being negotiated now”, adding: “Essentially it’s total access . . . We are getting everything we want at no cost.”

US markets continued a rise they began the day before in the wake of Trump’s decision to drop his military and tariff threats. On Thursday, the S&P 500 index closed 0.5 per cent higher, while the tech-heavy Nasdaq Composite gained 0.9 per cent.

The Stoxx Europe 600 closed 1 per cent higher.

At a press conference in Nuuk, Greenland’s capital, the territory’s prime minister Jens-Frederik Nielsen said he had not been briefed on the details of the discussions between Rutte and Trump.

But he added that Greenland was prepared to “discuss anything” as long as the island’s sovereignty was respected.

“We choose the Kingdom of Denmark,” Nielsen said. “We choose the EU. We choose Nato.”

Denmark’s defence minister Troels Lund Poulsen told public broadcaster DR it was “likely” the outcome of the negotiations could include more US bases on Greenland but “that is something we must discuss with the Americans”.

The US has cut its military presence in Greenland from its peak in the cold war, when it had dozens of facilities and more than 10,000 troops, to just one base and about 150 soldiers today.

The wide-ranging 1951 defence agreement allows the US to set up military bases across Greenland as long as it does not impinge on Denmark’s sovereignty.

Greenlandic and Danish officials said they had repeatedly proposed in recent years that the US could increase its military footprint.

A senior EU diplomat said many US business leaders at Davos had expressed “disapproval” at the market upheaval Trump had caused, adding that “Rutte offered him an off-ramp and he took it”.

One of the people briefed on the Rutte-Trump talks said the status of British bases in Cyprus was a model that could be explored as a way to bolster the US presence on the strategically important island — though the UK holds sovereignty over its bases in Cyprus.

Rutte said the arrangement would allow Nato countries to make the Arctic region safer.

“It remains to be seen what the eventual deal on Greenland would look like,” said one senior western official. “Not for sale, nor for lease. Denmark not willing to compromise. There’s very little change compared to where this all started.”

Danish officials now expect to start negotiations with the US side, led by vice-president JD Vance and secretary of state Marco Rubio, on a deal after agreeing to set up a high-level working group last week.

EU leaders held an emergency summit in Brussels on Thursday to discuss transatlantic relations. The dinner meeting was hastily convened before Trump retreated from his tariff threat to discuss retaliatory mechanisms drawn up by the European Commission.

The leaders were no longer likely to discuss measures to hit back against Trump for his threats, said a senior EU official involved in summit preparations. “The situation has changed in the past 24 hours,” the official added.

Following Trump’s threats, Rutte — the Dutch head of the US-led military alliance who has emerged as one of Europe’s most effective interlocutors with the Trump administration — went into action and spoke with Trump “very intensively from Saturday”, said a European official briefed on the talks.

“The core of the negotiations was Rutte. He really achieved a very, very big success,” the official added.

Additional reporting by Jacob Judah in Nuuk