Fitch says Greenland deal eases one US-EU friction point, other risks remain
Fitch says the September 18 US-Denmark-Greenland agreement removes one source of transatlantic tension, but tariff and NATO risks persist.
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Fitch Ratings says a deal giving the United States an expanded military footprint in Greenland removes one point of friction between Washington and Europe, but says broader tariff and NATO risks remain unresolved.
The agreement, reached on September 18 between the US, Denmark and Greenland, gives Washington greater security control over the island without transferring its sovereignty, according to Wikipedia's entry on the Greenland crisis, which cites the Danish and Greenlandic governments. The dispute traces back to US threats of annexation dating to January 2025, with a sharper escalation in January this year.
That escalation saw President Trump threaten tariffs of 10%, rising to 25% by June, on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland over their opposition to a US takeover of Greenland, according to Al Jazeera and The Hill. Trump suspended the threat after reaching a framework agreement with NATO chief Mark Rutte. Europe had responded by suspending approval of a separate trade deal reached with Trump in July, The Hill reported. At the time, Fitch warned that the tariff threat raised geopolitical risks in Europe, saying the central danger to sovereign credit ratings was a weakening of NATO's credibility on collective defense, which could revive tensions with Russia, and that pressure for higher defense spending was likely to build across Europe, according to Fitch commentary reported by Anews.
Fitch's latest view is that the Greenland agreement does not change that calculus. Iran continues to press conditions for nuclear talks and access to the Strait of Hormuz, military posturing continues on both sides, and tariff disputes between the US and Europe remain unresolved. A single Arctic security agreement, Fitch says, does not shift the fundamental risk picture.