Davos elite agreed to Trump’s ultimatum
World leaders, bosses of the world’s largest companies and many celebrities gathered in the small Swiss mountain town of Davos this week for the annual World Economic Forum.
On the other side of the Atlantic, President Donald Trump was beginning his political comeback as the new US President.
He vowed to end America’s “decline”, declaring, “Nothing will stand in our way”.
At the end of the gathering, President Trump was brought in directly from the White House webcam to deliver his message of world domination directly to the global elite.
While he charmed audiences with a credible picture of a booming US economy scaling new technological heights, he also intimidated those who chose not to relocate their factories to the US with threats of tariffs .
Tariffs cost the US treasury trillions of dollars for businesses exporting from foreign factories to the US market.
“Your prerogative,” he said, smiling like something out of a Godfather movie. And then for one of them, Bank of America head Brian Moynihan, a notable public criticism accused the lending giant of “debunking” many of its conservative supporters.
He was mumbling awkwardly about sponsoring the World Cup.
In the first week of his second term, most people in Davos were nodding in agreement because they were at a loss for what else to do.
Two worlds were colliding, as the ‘America First’ president looked like a 30-foot intergalactic emperor at the beating heart of the rules-based international economic order.
One thing it suggests is that the trade deficit is a problem for your domestic voters. IIt is quite another to suggest on an international stage that Canada is an ally of the G7Become a Kingdom of Your Nation, elicited gasps from the audience, and not just the Canadians.
By design the address was flashy and aggressive. For the rest of the world there was carrot and stick.
As delegates absorbed a mix of threats, invitations and sometimes praise, many were trying to determine how much damage Trump could do to the global trading system, while also assessing how technology-driven How ahead is their America in AI boom?
Davos has been the alternative pole of Trump’s second term since its first week.
His agenda had a consistency of using every means Lower energy prices, including putting pressure on the Saudis on oil.
He said this would not only help reduce inflation, but would also free oil dollars from Russia’s war coffers to help end the Ukraine war through economic means. The ceasefire in the Middle East has already bought Trump some geopolitical credibility in these regions.
Christine Lagarde, David Miliband and John Kerry walked into the hall. Various bank heads gathered on the stage to praise the President and then ask light-hearted questions.
The bottom line was this: Is President Trump serious that the campaign trail was looking like a threat to the world economic order? The answer will resonate for the next four years and beyond.
The answer most definitely seemed like yes. However, that doesn’t mean it will work.
Some prominent US CEOs told me they were preparing to impose tit-for-tat retaliatory tariffs on their exports. Their belief was that the President’s love of a rising stock market would restrict his deployment of tariffs.
But no one really knows. In any case, there is much to be gained. He has already withdrawn from the World Health Organization.
In the campaign there were whispers from his Project 2025 associates that they were also suggesting US withdrawal from the IMF and the World Bank.
Once the rest of the world decides to get back up after the Trump storm, it has some countermeasures.
Canadians are now reporting their retaliatory charges. In conversation with both the British Trade Secretary and the EU Trade Minister, Jonathan Reynolds And EU trade chief Maros SefcovicI discovered a desire for calm communication.
Both are making similar arguments to discourage Trump from sweeping tariffs.
Mr. Reynolds told me that since the US does not have a goods trade deficit with Britain, there is no need for tariffs.
Mr Sefcovic said the US should also really think about its services surplus.
But don’t they consider threats to the G7 and NATO allies Canada and Denmark (over Greenland) simply unacceptable and as absurd as France claiming back Louisiana? Sefcovic didn’t want to spoil anything.
Diplomats are listing American goods that Europe can now buy to demonstrate a “victory” for President Trump, ranging from weapons to gas to magnets in wind turbines.
It might make some sense for the remaining members of the G7 to work together on retaliation against the tariffs, in order to focus the attention of competing factions inside Congress and Trump’s court.
There is no sign of this happening.
The story of American technological supremacy is the epitome of brokerage – iWhich includes Amazon founder Jeff Bezos, Meta boss Mark Zuckerberg, Apple leader Tim Cook and Google chief Sundar Pitcher. – Had top seats at the inauguration this week.
While the US is ahead of Europe, its stance against China is more uncertain.
Featured in Davos’ talk was a high-performance, much cheaper AI model from DeepSeek made in China. The prediction that tech brothers would tear each other to pieces in Trump’s court appeared to be coming true within hours instead of months.
Meanwhile, while most, though not all, here in Davos seemed attracted by Trump’s tech-fueled optimism, some in Europe are also seeing this as a once-in-a-lifetime opportunity to attract top researchers who May be less attracted to direction. Of American politics. Christine Lagarde, head of the European Central Bank, had openly suggested this.
Others sought solace in the fact that Europe would no longer have to face Biden’s massive green subsidies, creating a more level playing field for Europe again.
President Trump is changing the terms of world trade. The rest of the world’s reaction to this is as important as what the Trump administration itself decides.
January 24: The headline of this story has been updated to better reflect its content.
