Europe’s Davos Reality Check
This week marked the World Economic Forum’s 56th Annual Meeting in Davos, Switzerland. The gathering brought together global leaders, industry executives, and a bipartisan delegation of U.S. governors and lawmakers. Among the many geopolitical issues on the agenda, President Trump’s continued threats to take over Greenland stole the spotlight.
Trump’s remarks underscored the uneasy moment the United States currently occupies in the global order, especially in its relationship with Europe. His speech ranged from criticism of longtime U.S. allies to trade and tariff strategy, regional security, AI development, nuclear power, housing affordability, migration, and, of course, Greenland. He assured the audience of world leaders and top executives that he “won’t use force” to take it over. Even so, markets back home reacted sharply, with U.S. stocks and bonds falling in response.
After stating he would impose tariffs on EU countries that did not support his proposed Greenland takeover, Trump met with NATO Secretary General Mark Rutte. In the aftermath, alongside other communications he publicly shared on Truth Social throughout the week, Trump announced that a “framework” for a deal had been reached. While the statement was vague and nonbinding, it appeared to steady financial markets over the course of the day.
The bipartisan coalition of U.S. governors also made headlines during the week, not only because California Governor Gavin Newsom was reportedly sidelined by the President. Other governors in attendance included Governor Gretchen Whitmer of Michigan, Governor Andy Beshear of Kentucky, and Governor Kevin Stitt of Oklahoma. The group participated in a public session emphasizing the importance of policymaking at the state level, and Newsom sat down with Ben Smith, Semafor’s co-founder and editor-in-chief, for a wide-ranging conversation about American politics.
On the business side, executives from Nvidia, Salesforce, and other major firms highlighted the role of North American companies in the global economy. Many technology leaders emphasized the importance of advancing AI, while also acknowledging the risk of labor-market displacement. They also discussed the broader outlook for the U.S. economy amid an increasingly unpredictable tariff environment.
The meeting capped off what has been one of the most volatile weeks for transatlantic relations in recent memory. Davos opened with abrupt market swings and jolting diplomatic surprises, and closed with little sense of resolution. What lingered instead was a question U.S. allies are voicing with growing frequency, both publicly and behind closed doors: were the disruptions of recent days simply a bout of instability, or the clearest signal yet of a lasting realignment in global leadership that will force them to navigate the future largely on their own?