Trump Announces Greenland Deal Framework, Halts European Tariffs

"...Markets and some European leaders welcomed the news that U.S. President Donald Trump was standing down from imposing further tariffs on European countries — but others were left bewildered...."

"...One strategist told CNBC: "Nobody's going to believe him anymore."..."

"...Ed Price, senior non-resident fellow at New York University, told CNBC Thursday that striking a deal "requires two people to tango," describing Trump's Davos speech as "a monologue not a dialogue."..."

"...Price also said the framework was "the start of a process, not the end," warning that a precedent of bargaining over disputed territories could tempt future attempts elsewhere...."

"...Chinese state media, meanwhile, urged the EU on Wednesday to reassess its security reliance on the U.S. and pursue greater "strategic autonomy."..."

"...Trump has "advantaged" China in the long run by signaling that U.S. commitments can swing wildly with political incentives, Price added...."

"...Robin Brooks, a senior fellow at the Brookings Institution, said Trump's toned-down rhetoric had "nothing to do with Europe" and was more likely driven by concerns about the recent spikes in global bond yields, which jumped on fears of a fresh trade war...."

"...Brooks also said Europeans had limited leverage in negotiations with Trump...."

"..."Europeans have, by all accounts, been freeriding on the U.S. security umbrella. They need to spend more. They will," Brooks said, caveating that most countries, except for Germany, lack fiscal space. "A lot of these countries have no fiscal firepower whatsoever," he told CNBC's "Squawk Box Asia."..."

"...In his Wednesday speech at Davos, Trump acknowledged financial markets' discomfort with his threats over Greenland as he publicly ruled out using force to take it for the first time...."

"...David Roche, veteran investor from Quantum Strategy, said Trump's Greenland threat is "the biggest 'taco' that you could get," referring to the phrase 'Trump Always Chickens Out,' which has come to define a market strategy anticipating the president reneging on his threats...."

"...But Roche said this was becoming a problem — the bigger Trump's threat, the more allies expect him to "march his troops up the hill and then down the hill."..."

"..."What the European Union has learned is that if you face up to them, you win," Roche said. "Nobody's going to believe him anymore."..."