Trump Arrives at Davos Amid Greenland Tariff Storm, Tensions with European Allies Escalate

President Donald Trump has arrived at the World Economic Forum in Davos, Switzerland, on Wednesday amid a tumultuous diplomatic standoff with European allies over his escalating Greenland acquisition campaign and threatened tariff regime. The forum, traditionally a stage for discussing global economic cooperation, has instead become the epicenter of a transatlantic trade war in the making.

## Trump's Greenland Gambit Overshadows Davos Agenda

Trump arrived at the World Economic Forum in Davos, Switzerland, on Wednesday, as his revived tariff threats against allies over his pursuit of Greenland have roiled markets and upended trading relationships forged just months earlier. The president's aggressive push to acquire the Danish territory has become the dominant talking point at this year's forum, relegating traditional economic discussions to the sidelines.

Trump, who will speak in Davos on Wednesday and said on social media that he had agreed to "a meeting of the various parties" there, has insisted the U.S. needs the territory for security reasons against possible threats from China and Russia. Despite widespread international opposition and firm rejections from Greenland and Denmark, Trump has doubled down on his ambitions, signaling no willingness to negotiate away from his core objective.

## The Tariff Threat: February 1 Deadline Looms

The US president said on Monday that he will impose 10% tariffs on the EU as part of his push to acquire Greenland; the duties would take effect on February 1 and would rise to 25%. This escalating tariff structure represents Trump's economic leverage in forcing European nations to support—or at minimum cease opposing—his Greenland acquisition bid.

Just days before the forum began, Trump on social media threatened to tariff goods from eight European nations and NATO members until they support a U.S. deal to purchase Greenland. The threatened tariff regime has sent shockwaves through financial markets, with stocks headed toward their worst day in two months on Tuesday as the markets digested Trump's threats of fresh tariffs against European countries in order to obtain control of the Arctic territory.

## European Leaders Unite in Defiant Response

European leadership has responded with unprecedented coordination and resolve. Emmanuel Macron criticised tariff threats and cautioned against "imperial ambitions," highlighting US moves on Greenland and global conflicts eroding the rules-based order. Meanwhile, Ursula von der Leyen asserted Greenland's sovereignty as "non-negotiable," warning that threatened US tariffs risk a damaging downward spiral in relations.

The European Union's top official on Tuesday described U.S. President Donald Trump's planned new tariffs over Greenland as a "mistake" between long-standing allies and called into question Trump's trustworthiness, while French President Emmanuel Macron said the situation could push the EU to deploy one of the its most powerful tools of retaliation. European leaders are reportedly preparing an unprecedented arsenal of countermeasures, including what Macron has referred to as the EU's "trade bazooka."

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. Unofficially known as the "trade bazooka," the anti-coercion instrument could sanction individuals or institutions found to be putting undue pressure on the EU.

## Tensions Test NATO Alliance and Trade Frameworks

Canadian Prime Minister Mark Carney on Tuesday delivered a forceful speech that, without mentioning Trump explicitly, argued that his policies are leading to the breakdown of the international order. "Let me be direct: We are in the midst of a rupture, not a transition," Carney said. "Great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited."

The standoff threatens to unravel a carefully negotiated trade framework. Trump's new tariff threat could also undercut a US-EU trade framework reached this summer that the Trump administration worked hard to seal but has yet to be fully ratified. "The European Union and the United States have agreed to a trade deal last July," von der Leyen said in Davos. "And in politics as in business — a deal is a deal. And when friends shake hands, it must mean something." Trump has warned Europe against retaliatory action for the coming new tariffs.

## Market Turmoil and Strategic Asset Selling

The tariff storm has already triggered significant financial market disruptions. The "sell America" trade has bounced back this week after Trump went to war with European leaders over Greenland. US stocks and bond prices have dropped as tensions between the two sides escalate. In a symbolic act of protest, Danish pension operator Akademikerpension announced it would be selling $100 million in US Treasurys. Anders Schelde, AkademikerPension's investing chief, said that it would do this due to "poor US government finances."

European capitals may hit the U.S. with 93 billion euros ($107.71 billion) worth of tariffs or restrict American companies from the bloc's market in response to U.S. President Donald Trump's threats to NATO allies opposed to his campaign to take over Greenland, the Financial Times reported.

## What Lies Ahead at Davos

Trump's address to the forum is scheduled for Wednesday, where Trump told reporters this week that his main message in Davos will be "how well the United States is doing." However, Trump may well talk about the cost of living in that speech Wednesday, but his belligerent foreign policy is once again overshadowing his attempts at a cohesive economic message.

The US president is scheduled to hold meetings with European leaders who are furious over his escalating bid to take over Greenland, the territory of a fellow NATO ally in Denmark. These carefully choreographed encounters will determine whether cooler heads can prevail or whether the transatlantic alliance faces its most serious test in recent memory. With February 1 marking the implementation date for Trump's threatened tariffs, the clock is ticking on diplomatic efforts to find common ground.