President Donald Trump’s threat to impose tariffs on European Union members over Greenland has drawn warnings from U.S. allies about potential strains on the NATO alliance. European officials have expressed concern that the dispute could undermine long-standing transatlantic cooperation.

On Tuesday, the EU’s chief executive described Trump’s proposed tariffs on eight member states as a “mistake” and questioned Washington’s reliability as a partner. French President Emmanuel Macron suggested that the bloc could respond by deploying one of its most powerful economic instruments, informally known as a trade “bazooka.”

The escalating tensions over Greenland, coupled with fears of a widening U.S.-Europe trade conflict, rattled global markets on Tuesday, pushing Wall Street stocks lower.

Trump has defended his approach as negotiating from a position of strength. On the anniversary of his inauguration, he left Washington for the World Economic Forum in Davos, Switzerland, presenting an opportunity to ease tensions he has helped ignite.

European leaders, however, remain steadfast in support of Denmark’s governance over semiautonomous Greenland, signaling a firm response to any perceived challenge to territorial integrity. The leader of Greenland stressed that international law must be respected and described it as “not a game.”

The dispute highlights the fragility of alliances in the face of unilateral trade threats and underscores the balancing act facing global leaders amid rising protectionist pressures.