US, Europe to find way out of Greenland dispute: American Treasury chief

US Treasury Secretary Scott Bessent said on Tuesday that Washington and European capitals would find a way forward on the dispute triggered by the US administration’s push to take over Greenland, as he urged markets and governments to avoid “hysteria” over the risk of a trade war, news agency Reuters reported.

 

Speaking on the sidelines of the World Economic Forum in Davos, Switzerland, Bessent played down fears of escalation after Donald Trump announced tariffs on imports from European allies that oppose US control of Greenland, an autonomous territory within the Kingdom of Denmark.

 

“It’s been 48 hours. As I said, sit back, relax...I am confident that the leaders will not escalate and that this will work out in a manner that ends up in a very good place for all,” Bessent was quoted as saying by Reuters.

 

Tariff threat and European response

Trump said on Saturday that tariffs would apply to goods from European countries resisting Washington’s stance on Greenland. European governments have argued that such measures would breach a trade agreement reached with Trump last year.

 

European Union leaders are due to meet at an emergency summit in Brussels on Thursday to discuss possible retaliation. One option under consideration is a package of tariffs on €93 billion ($108 billion) worth of US imports, which could automatically take effect on February 6 after the expiry of a six-month suspension.

 

Bessent said the issue had surfaced only recently and that a negotiated outcome would ensure national security interests for both the United States and Europe.

‘Calm down the hysteria’

Asked about the prospect of a prolonged transatlantic trade conflict, Bessent rejected what he described as worst-case assumptions.

 

“Why are we jumping there? Why are you taking it to the worst case?… Calm down the hysteria. Take a deep breath,” he said, as reported by Reuters.

 

He also dismissed speculation that European governments might respond by selling US Treasury bonds held as reserves, which could raise borrowing costs for Washington. US government debt, he said, remained “the most liquid market” and the backbone of global finance, adding that European governments would continue to hold it.

Warning against retaliation

According to The Guardian, Bessent went further by cautioning countries against retaliating over the tariffs announced in connection with the Greenland dispute. Addressing concerns about uncertainty for companies, he told reporters in Davos that similar panic had followed Trump’s earlier tariff moves before markets stabilised.

 

“I would say this is the same kind of hysteria that we heard on April 2nd. There was a panic,” he said, referring to Trump’s initial “Liberation Day” tariffs that were later reversed after market turmoil.

 

“What I am urging everyone here to do is sit back, take a deep breath, and let things play out,” Bessent added.

 

He also pointed to last year’s escalation between the United States and China, which saw tariffs climb to 145 per cent and 125 per cent respectively before relations steadied. “What President Trump is threatening on Greenland is very different than the other trade deals. So I would urge all countries to stick with their trade deals,” he said.