Trump’s Greenland strategy draws from familiar playbook

Now, those same leaders are rushing to set up meetings with Trump about the future of the territory after the U.S. president threatened to bludgeon Europe’s economy with stiff tariffs.

The shift is the result of a familiar playbook for Trump: make audacious demands, threaten economic or military consequences if those demands aren’t met—then wait for his opponents to bend.

On Tuesday, the president declined to take aggressive measures off the table. Asked by a reporter how far he is willing to go to acquire Greenland, Trump replied: “You’ll find out." But he also at times struck a more conciliatory tone. “I think that we will work something out where NATO is going to be very happy, and where we’re going to be very happy," the president said at the White House.

The president’s comments reflected a desire by some of his advisers to reach a compromise with Denmark, which controls the roughly 800,000-square-mile island, and ease tensions with European leaders.

It isn’t the first time Trump has leveraged the threat of economic pain to bring his opponents to the negotiating table. That strategy is at the center of his trade policy agenda. In Truth Social posts and in speeches, Trump warned allies and adversaries alike that they would face destructive tariffs, prompting countries to launch a spate of panicked negotiations with the administration to lower tariff rates. Separately, Trump’s repeated criticism of the North Atlantic Treaty Organization, and threats to undercut the trans-Atlantic alliance, have compelled member countries to ratchet up their spending on defense.

Some of Trump’s advisers, including Treasury Secretary Scott Bessent, called for calm this week, trying to avoid an all-out trade war as Europe considered retaliatory tariffs. “Sit back, take a deep breath, do not retaliate, do not retaliate, the president will be here tomorrow and he will get his message across," Bessent said Tuesday on the sidelines of the World Economic Forum in Davos, Switzerland.

Stocks fell sharply on Tuesday, suffering their worst day since October, following Trump’s ramped-up threats to take control of Greenland. The Dow industrials lost 871 points, or 1.8%, the dollar weakened and Treasury yields rose, with the 10-year touching its highest level since August. Trump is known to closely track the fallout from his policy moves, and he paused tariffs in April after the markets plunged.

White House spokesman Kush Desai said the markets have confidence in the Trump administration’s policies. “Accelerating GDP growth, cooled inflation, and over a dozen historic trade deals all prove that this Administration continues to deliver for American workers and companies," he said.

Trump is set to arrive in Davos early Wednesday. He will hold meetings with world leaders that are expected to focus in part on Greenland. Denmark isn’t scheduled to participate in the meetings at this time, according to a Danish official.

Trump’s interest in Greenland, which stretches back to his first term, has at times waned. By the end of last year, Danish officials were holding out hope that Trump’s desire to acquire Greenland was on the back burner.

But they were caught off guard when Trump appointed Louisiana Gov. Jeff Landry as envoy for Greenland, saying on social media that Landry “understands how essential Greenland is to our National Security."

Weeks later, discussions between top officials from Greenland and Denmark and Vice President JD Vance and Secretary of State Marco Rubio ended with little agreement on a path forward.

European officials believed a visible show of unity would deter escalation. But their efforts backfired.

Late last week, a small group of military and diplomatic personnel from France, Germany, Norway, Sweden, the Netherlands, Finland and Britain were sent to Greenland to show solidarity with Denmark and showcase a willingness to secure the Arctic island. But Trump interpreted the move as a direct threat to his desire for Greenland, according to people close to him, and retaliated on Saturday by announcing 10% tariffs on those countries starting next month and threatening to raise those tariffs to 25% in June.

National Economic Council Director Kevin Hassett suggested Trump’s tariff threat is part of his negotiating toolbox, adding that he is confident that the president will negotiate a deal that is good for the U.S. and good for allies.

“When you are engaged in negotiation with any country and with President Trump, you’ll see both sides take very strong and extreme positions, but in the end, the president is the person who wrote ‘The Art of the Deal’ because he’s so good at dealmaking," Hassett told Fox News on Sunday.

“So I think right now it’s really a good time for cooler heads to prevail and for us to disregard the rhetoric and get to the table and see if there can’t be a deal that’s worked out that’s best for everybody," he continued.

The president is expected to lay out his economic agenda, housing policy, and his accomplishments over the past year during his speech in Davos. He will also discuss his national security goal of exerting control over the Western Hemisphere, according to senior administration officials.

Trump has said that acquiring Greenland is key to preventing China and Russia from having a grip on the strategically important Arctic region. He has also argued that the island is important to his plans to implement a “Golden Dome" missile-defense plan. Trump’s advisers have discussed the potential benefits of tapping the country’s mineral reserves.

The president has also characterized his desire for Greenland in personal terms, telling Norway’s prime minister he is making the push because he didn’t win the Nobel Peace Prize.

One year into his second term, Trump remains largely unencumbered and advisers rarely push back on his instincts. In a nearly two-hour press conference on Tuesday, he said he should have renamed the Gulf of Mexico after himself. He then clarified that he was joking, and said he could picture headlines about his staff rebuffing his efforts.

“My people don’t rebuff me too much," he said, looking at White House press secretary Karoline Leavitt, who laughed.

Write to Meridith McGraw at Meridith.McGraw@WSJ.com and Natalie Andrews at natalie.andrews@wsj.com