Donald Trump has walked back his threat to impose sweeping US tariffs on eight European countries, claiming he had agreed “the framework of a future deal” on Greenland.

Four days after vowing to introduce steep import duties on a string of US allies over their support for Greenland’s continued status as an autonomous Danish territory, the president backed down.

The US will not hit Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland with tariffs of 10% from 1 February after all, Trump wrote on his Truth Social platform. Over the weekend, he had also threatened to lift the tariffs to 25% from 1 June.

The threat had prompted widespread apprehension; criticism from senior European politicians, who declared they “will not allow ourselves to be blackmailed”; and warnings from economists.

European Union leaders had threatened to deploy the bloc’s so-called anti-coercion instrument (ACI), otherwise known as the “trade bazooka”, which would have allowed the EU to retaliate in defense of coercion measures through extraordinary trade sanctions.

After what he called a “very productive” meeting with the Nato secretary general, Mark Rutte, on Wednesday, Trump claimed he had formed “the framework” of a deal over Greenland, without providing more information.

“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1,” the president said.

Trump did not give further details of the agreement, but said talks were continuing concerning a US missile defense shield that would be in part based in Greenland.

The deal would be in force “for ever”, he claimed at the Davos economic forum in Switzerland. “We have a concept of a deal. I think it’s going to be a very good deal for the United States, also for them,” Trump told CNBC, the financial news network. “It’s a little bit complex, but we’ll explain it down the line.”

A Nato spokesperson, Allison Hart, said: “Discussions among Nato allies on the framework the president referenced will focus on ensuring Arctic security through the collective efforts of allies, especially the seven Arctic allies.

She added: “Negotiations between Denmark, Greenland, and the United States will go forward aimed at ensuring that Russia and China never gain a foothold – economically or militarily – in Greenland.”

But Rutte, secretary general of the alliance, sounded a note of caution. “I think it was a very good meeting tonight,” he told the AFP news agency. “But there’s still a lot of work to be done.”

Denmark’s foreign minister said Trump had sent positive signals by saying he would not use military force to seize Greenland.

“Trump said that he will pause the trade war. He says: ‘I will not attack Greenland.’ These are positive messages,” Lars Løkke Rasmussen told Danish public television DR.

Trump “also had a good conversation with the Nato general secretary”, he said, without giving details.

At a Nato meeting on Wednesday, military officers from member states of the transatlantic alliance discussed a compromise through which the US would be granted sovereignty over small pockets of Greenland, the New York Times reported, citing three unnamed senior officials. Two of the officials compared the proposal with the UK’s military bases in Cyprus, which are regarded as British territory, it said.

​Hours before climbing down on tariffs, during a rambling speech in Davos, Trump said the US would not use force to seize Greenland, but stressed that he still planned to wield his nation’s economic and diplomatic power to obtain it – and extolled the benefits of US tariffs.

“You’re all party to them – in some cases, victims to them,” he told the assembled delegates from around the world. “But in the end, it’s a fair thing, and most of you realize that.”

Yet the US president has repeatedly backed down from his most extreme threats on tariffs – most notably last spring, when he hailed the start of a new era for the US economy, only to shelve a vast wave of tariffs.

Concern over Trump’s aggressive trade strategy is not just international, but domestic. His tariffs have repeatedly raised fears for the US economy. Wall Street suffered its worst day since October on Tuesday, the first day it traded after Trump’s threat to attack Nato allies with tariffs over Greenland.

The US president pays close attention to stock-market movements, and mentioned them several times in his speech on Wednesday. He claimed credit for the fact they had hit a series of record highs since he returned to office, but acknowledged they dipped this week “because of Iceland”, apparently meaning his pursuit of Greenland.

After he posted on Wednesday, global markets recovered. The benchmark S&P 500 closed up 1.2% in New York, as the Dow Jones industrial average – closing in on 50,000 for the first time – climbed 1.2% to finish at 49,077.23.

Trump’s recent obsession with Greenland, after the US toppled the regime of Nicolás Maduro in Venezuela, has rattled global officials in recent weeks. Trump claims that Denmark owes Greenland to the US because it helped defend the territory during the second world war, which has been debunked, and that the US needs the territory for national security purposes.

In his speech at Davos, Trump said the US would not use military force to take Greenland but demanded “immediate negotiations”. “We want a piece of ice for world protection, and they won’t give it,” Trump said. “We’ve never asked for anything else.”

His climbdown on tariffs came hours after the European parliament suspended indefinitely the ratification of the US-EU tariff deal sealed last summer, in a move that showed politicians were, for the first time, willing to face Trump down.