US President Donald Trump on Wednesday retreated from earlier threats to impose tariffs over Greenland, ruled out the use of force and said a framework for a deal had been reached following talks with NATO Secretary General Mark Rutte. The argument concerning the Danish territory put the greatest fear of a transatlantic rift in a long time.

Trump, who was speaking in Davos, Switzerland, where he had a meeting with Rutte during the World Economic Forum, made a softer statement than in recent weeks that had been aggressive and had NATO allies worried and had also raised fears of a new trade conflict. Over the weekend, he had issued a warning about increasing tariffs on exports from eight European countries to the US.

After the meeting, Trump said Western Arctic allies could work toward a new agreement on the strategically important island of about 57,000 people. He said the arrangement would address US security interests, including a proposed “Golden Dome” missile defence system, ensure access to critical minerals, and counter growing Russian and Chinese activity in the Arctic.

“It’s a deal that everybody’s very happy with,” Trump told reporters. “It’s a long-term deal — the ultimate long-term deal. It puts everybody in a really good position, especially when it comes to security and minerals.” He added that the agreement would be permanent in nature.

Rutte later said the question of Greenland’s sovereignty did not arise in his discussions with Trump. “That topic was not talked about at all in my night talks with the president,” he said in the interview, adding that Trump was mainly concerned with the way the Arctic region could be better guarded by NATO partners due to the increasing Chinese and Russian activities.

At the same time, Trump had issued a strong critique of some nations, thereby, raising diplomatic tensions. European diplomats remarked that although the president’s subsequent alteration of attitude did not entirely settle the dispute, it was still a step in the right direction towards decreasing the tensions that had risen between the partners who were attempting to solve the problem through private discussions.

NATO’s representative declared that the discussions among Denmark, Greenland, and the United States would go on with the intention of preventing Russia and China from establishing an economic or military foothold in Greenland. No specific time or place for the talks was mentioned.. Trump said Vice President J D Vance, Secretary of State Marco Rubio and envoy Steve Witkoff would be involved in further negotiations.

Meanwhile, Russian President Vladimir Putin downplayed the issue, saying developments in Greenland were “of absolutely no consequence” to Russia, according to state news agencies.