Everyyearbusiness leaders,politiciansand campaigning groupsfrom around the worlddon their snow boots and$1,000Arc’teryx Macai coatsand head for theSwiss ski resort of Davos.Just as New YearfollowsChristmas,it’sJanuary andtime forthe World Economic Forum’s annual meeting.
WEFhas its fair share of critics–ahot airplayground for the rich and powerful, out of touch with the realities of life on Main Street, obsessed with‘globaldialogue’and the‘rules-basedorder’.Thedetractors charge sheethas a familiar ring.
Butwhen thatrules-basedorderisitself under threatand crisis is in theair,this meeting in themountains suddenlyhas a point.
After the 2008 financialcrash,andwithWestern capitalism on the brink of seizure,the sessions buzzed as banking leaders,including Jamie Dimon,chief executive ofJPMorgan,and Bob Diamond, chief executive of Barclays, clashed with presidents and prime ministers. I was in themaincongressarenain 2011when Dimoninsisted that the regulatory reactionof governmentshad gone too far (“Too much is too much”he said) only to be slapped down by Nicolas Sarkozy, thenpresident ofFrance,direct from the public stage. It was a row forthe ages.
I have been coming to Davos for 16 years,and this year is the most reminiscent of those post-credit-crunchflare-upswhen the very fundamentals ofcapitalismwerebeing questioned. This time, it istheinternationalorderand the ability of the West to hang togetherin the face ofglaringly different approaches toan intenseseries ofrisks.
President Donald Trump, here for the firsttime since2020,will dominate.On Gaza,Venezuela, Ukraineand most shockingly for Europe, Greenland,the presidenthas thrown multiple bouldersintoadiplomatic sea alreadyfrothingwith sharks.
At the weekend,hethreatenedto imposeincreasedtariffson those who stand in the way of the US annexation of Greenland (a self-governingislandand part ofDenmark)—10%now, rising to 25%in June.France, Germany, the U.K.,the Netherlands, Denmark, Norway, Sweden,and Finland, who have all beencritical,are his target.
“I have been coming to Davos for 16 years,and this year is the most reminiscent of those post-credit-crunchflare-upswhen the very fundamentals ofcapitalismwerebeing questioned…”
The European Unionhas responded,signaling anewtrade war between two of the world’s most powerful economies.Emannuel Macron, presidentof France,hasdemandedthat the EUuse its‘anti-coercion instrument’for the first time, atrade weaponbroughtinto defend EU member states against Chinese tariffsin 2023.In Brussels, talk is of€93bn($108bn)of newleviesandrestrictions onAmerican companies tradingin the EU. European indices are sliding.The price of gold—a hedge against market risk—has risen to newhighs.
Ursula von der Leyen, the President of the European Commission, speaks tomorrowand Trump isdue on Wednesday,with the largest American contingenteverto visit the World Economic Forum– includingfive CabinetSecretaries and hundreds of officials.Multiplebilateralmeetingsaimed atfindinga solutionto the increasingly fraughtwar of wordsare being hurriedly arranged.
“Territorial integrity and sovereignty are fundamental principles of international law,”von der Leyensaid over theweekend.“They are essential for Europe and for the internationalcommunity as a whole. Tariffs would undermine transatlantic relations and risk a dangerous downward spiral.”
I was at Davos in 2017 when XiJinping spoke of the value of free trade. And in2018, when Trumpreassuredthe audiencethat America First did not mean America Alone.In 2026,Trumpwill again dominate, a president in a hurryto reshape the global order.How Europeactsnowwill set the tone for the rest ofhispresidency.Can adefensedealonGreenland be done, satisfying Trump’s demandsfor greater security? Will he follow through on the newtariffs? Will the EU accelerate its retaliation?
For many at the World Economic Forumthis week, it seems almost preposterous to be writing such sentences.We are inunchartedterritory.
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