European Commission President Ursula von der Leyen was responding to Trump’s announcement that starting February, a 10% import tax will be imposed on goods from eight European nations that have rallied around Denmark in the wake of his escalating calls for the United States to take over the semi-autonomous Danish territory of Greenland.

“The European Union and the United States have agreed to a trade deal last July,” Von der Leyen said at the World Economic Forum in Davos, Switzerland. “And in politics as in business – a deal is a deal. And when friends shake hands, it must mean something.”

“We consider the people of the United States not just our allies, but our friends. And plunging us into a downward spiral would only aid the very adversaries we are both so committed to keeping out of the strategic landscape,” she added.

She vowed that the EU’s response “will be unflinching, united and proportional.”

Trump has insisted the U.S. needs the territory for security reasons against possible threats from China and Russia.

Earlier Tuesday, U.S. Treasury Secretary Scott Bessent said America’s relations with Europe remain strong and urged trading partners to “take a deep breath” and let tensions driven the new tariff threats over Greenland “play out.”

“I think our relations have never been closer,” he said.

But Danish Prime Minister Mette Fredriksen, speaking in the Danish parliament, said that “the worst may still be ahead of us.” She said that “we have never sought conflict. We have consistently sought cooperation.”

Trump’s threats spark diplomatic flurry across Europe

The American leader’s threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.

The EU has three major economic tools it could use to pressure Washington: new tariffs, suspension of the U.S.-EU trade deal, and the “trade bazooka” — the unofficial term for the bloc’s Anti-Coercion Instrument, which could sanction individuals or institutions found to be putting undue pressure on the EU.

Macron said in Davos that “the anti-coercion mechanism is a powerful instrument and we should not hesitate to deploy it in today’s tough environment.” He pushed back against aggressive U.S. trade pressures and “an endless accumulation of new tariffs.”

Earlier Tuesday, Trump posted on social media that he had spoken with NATO Secretary General Mark Rutte. He said “I agreed to a meeting of the various parties in Davos, Switzerland.”

France’s Macron suggests G-7 meeting in Paris this week

Trump also posted a text message from Emmanuel Macron in which the French president suggested a meeting of members of the Group of Seven industrialized democracies in Paris after the Davos gathering. An official close to Macron, who spoke anonymously in line with the French presidency’s customary practices, confirmed the message shared by Trump is genuine.

Later, Trump posted some provocatively doctored images. One showed him planting the U.S. flag next to a sign reading “Greenland, U.S. Territory, Est. 2026.” The other showed Trump in the Oval Office next to a map that showed Greenland and Canada covered with the U.S. Stars and Stripes.

In a sign of how tensions have increased in recent days, thousands of Greenlanders marched over the weekend in protest of any effort to take over their island.

In his latest threat of tariffs, Trump indicated that the import taxes would be retaliation for last week’s deployment of symbolic numbers of troops from the European countries to Greenland — though he also suggested that he was using the tariffs as leverage to negotiate with Denmark.

Calls for a stronger Europe against Trump’s threats

Denmark’s minister for European affairs called Trump’s tariff threats “deeply unfair.” He said that Europe needs to become even stronger and more independent, while stressing there is “no interest in escalating a trade war.”

“You just have to note that we are on the edge of a new world order, where having power has unfortunately become crucial, and we see a United States with an enormous condescending rhetoric towards Europe,” Marie Bjerre told Danish public broadcaster DK on Tuesday.

Speaking on the sidelines of Davos, California Gov. Gavin Newsom slammed Europe’s response to Trump’s tariff threats as “pathetic” and “embarrassing,” and urged European leaders to unite and stand up to the United States.

“It is time to get serious, and stop being complicit,” Newsom told reporters. “It’s time to stand tall and firm, have a backbone.”

On Monday night, Greenland’s European backers looked at establishing a more permanent military presence in the High North to help guarantee security in the Arctic region, a key demand of the United States, Swedish Defense Minister Pål Jonson said.

Jonson said after talks with his counterparts from Denmark, Greenland and Norway that European members of NATO are currently “doing what’s called a reconnaissance tour in order to identify what kind of needs there are when it comes to infrastructure and exercises and so forth.”

In Moscow, Russian Foreign Minister Sergey Lavrov strongly denied any intention by Russia and China to threaten Greenland, while also describing Greenland as a “colonial gain” for Denmark. At a news conference, he said that “in principle, Greenland isn’t a natural part of Denmark.”

US-UK tensions over Chagos Islands

In another sign of tension between allies, the British government on Tuesday defended its decision to hand sovereignty of the Chagos Islands to Mauritius after Trump attacked the plan, which his administration previously supported.

Trump said that relinquishing the remote Indian Ocean archipelago, home to a strategically important American naval and bomber base, was an act of stupidity that shows why he needs to take over Greenland.

In a speech to lawmakers at Britain’s Parliament on Tuesday, U.S. House of Representatives Speaker Mike Johnson said he hoped to “calm the waters” as Trump roils the trans-Atlantic relationship with his desire to take over Greenland.

Johnson said the U.S. and the U.K. “have always been able to work through our differences calmly, as friends. We will continue to do that.”

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AP writers Sylvie Corbet in Paris, Jill Lawless in London, Lorne Cook in Brussels, and Elaine Kurtenbach in Bangkok contributed to this report.

But Mark Dixon, CEO and founder of International Workplace Group (IWG) CEO isn’t buying it. From his vantage point, running the world’s largest flexible office provider—with more than 8 million users across 122 countries and 85% of the Fortune 500 among its customers—the math doesn’t add up.

“Everyone is focused on productivity, so no time soon,” Dixon says flatly.

“It’s about the cost of labor,” Dixon explains to Fortune. The U.S. and U.K. are experiencing significant cost-of-living crises. At the same time, he says, businesses are experiencing a “cost of operating crisis.” 

“Everyone’s having to control their labor costs because all costs have gone up so much, and you can’t get any more money from customers, so therefore you have to get more out of people.”

Essentially, companies can’t afford to pay the same wages for fewer hours, and they can’t pass the difference on to customers. So any time ‘freed’ by automation is far more likely to be filled with new tasks than handed back to workers. 

Elon Musk says work will be optional in the future—but this CEO says AI may create more work, not less

Silicon Valley’s loudest voices frame AI as a route to more leisure. The world’s richest person and the boss of Space X, Tesla and X, Elon Musk has gone as far as predicting work will be completely “optional” and more like a hobby, in as little as 10 years. 

In reality, Dixon suggests that this scenario would only happen if there’s not enough work to go around, rather than bosses suddenly becoming benevolent. But in his eyes, AI will most likely create more—not less—work. 

Every major technological shift, he argues, has followed a similar arc: fear of displacement, followed by an expansion of opportunity.

“AI will speed up companies’ development, so there’ll be more work, it’ll just be different work,” he says.

In 19th-century Britain, Dixon recalls English textile workers protesting against new automated machinery, fearing it threatened their livelihoods, lowered wages, and de-skilled their craft during the Industrial Revolution. They were called Luddites.

“They went around the country smashing up the looms to stop progress. But look, in the end, you’ve heard of the Industrial Revolution. That’s what came from those looms and factory production.” As mass production made goods more available, retail grew; more managers were needed to oversee the machines; the middle class grew, and so on. 

Likewise, there was a similar palpable fear when computers first burst on the scene in the 1980s. The 1996 book Women and Computers detailed people fearing becoming “a slave” to machines and feeling aggressive towards computers.”

But since the explosion of the PC (and then the internet, the Cloud, social media, and so on), most professions have undergone a digital rebrand—instead of disappearing altogether. 

Copywriters now use laptops instead of typewriters; designers rely on Adobe Photoshop instead of pen and paper; and a plethora of IT roles were created along the way. 

“It’s impossible to stop progress,” Dixon concludes.  

“Companies have to do what companies have to do, and it’s really important for young people coming into the marketplace to work a little bit harder on really selecting the right jobs, the right avenue, getting extra skills in things like AI. Whatever job you’re going to do, you’ve got to be good at tech.”

Federal Reserve Chair Jerome Powell will attend the Supreme Court’s oral argument Wednesday in a case involving the attempted firing of Fed governor Lisa Cook, an unusual show of support by the central bank chair.