World leaders, bosses of the world’s biggest companies and a handful of celebrities gathered this week in the small Swiss mountain town of Davos for the annual World Economic Forum.
Across the Atlantic, President Donald Trump began his political comeback as the new president of the United States.
“Nothing will stand in our way,” he declared, while promising to end America’s “decline.”
Towards the end of the meeting, President Trump was beamed directly from the White House webcam to deliver his message of world domination directly to the global elite.
While he charmed, almost seduced, the public with a credible image of a booming American economy poised to reach new technological heights, he simultaneously threatened with threats of tariffs those who did not choose to move their factories in the United States.
Billions of dollars in tariffs for the U.S. Treasury on companies that export to the U.S. market from foreign factories.
“Your prerogative,” he says, with a smile that wouldn’t be out of place in a Godfather movie. And then for one of his own, the president of the Bank of America, Brian Moynihan, who was the subject of a remarkable public denunciation, accusing the credit giant of “unbanking” many of his conservative supporters.
He mumbled awkwardly that he would sponsor the World Cup.
During this first week of his second term, most people in Davos were nodding along, not yet knowing what else to do.
Two worlds collide, as the “America First” president is teleported like a 30-foot interplanetary emperor, to the beating heart of the rules-based international economic order.
It’s one thing to suggest that trade deficits are a problem for your domestic electorate. It’s quite another to suggest at an internationalist forum that a G7 ally, Canada, become a state of your nation, drawing gasps from the audience, and not just from Canadians.
The address was, by design, charming and offensive. There was the carrot and the stick for the rest of the world.
As delegates absorbed the mix of threats, invitations and, at times, praise, many appeared to be trying to decide how much Trump might harm the global trading system, while also assessing his America’s lead in this trade boom. technology-driven AI.
Since this first week, Davos has been the alternative hub of Trump’s second term.
His program was consistent and consisted of using all means to lower energy prices, including pressuring the Saudis on oil.
He said this would not only help reduce inflation, but also drain Russia’s war chests of oil dollars to help end the war in Ukraine, through economic means. The Middle East ceasefire has already earned Trump some geopolitical credibility in these circles.
Christine Lagarde, David Miliband and John Kerry shuffled into the room. Various bank executives gathered on stage to congratulate and then lightly question the president.
The bottom line was this: Is President Trump serious about what looks like campaign threats against the global economic system? The answer will reverberate over the next four years and beyond.
The answer seemed to be yes, without a doubt. However, that doesn’t mean it will work.
Some top U.S. CEOs have told me they are preparing for retaliatory tariffs to be applied to their exports. Their assumption was that the president’s love of a rising stock market would constrain his deployment of tariffs.
But no one really knows. Either way, there is much to be gained. He has already withdrawn from the World Health Organization.
On the walks, it was rumored that his allies in Project 2025 were also suggesting the United States withdraw from the IMF and the World Bank.
The rest of the world does indeed have a certain counter-power, once it decides to recover after the whirlwind of Trump.
Canadians are now informed of their retaliatory tariffs. In conversations with the UK’s Secretary of State for Business and EU Trade Minister, Jonathan Reynolds, and with the European Union’s trade chief, Maros Sefcovic, I detected a desire for peaceful dialogue.
Both make similar arguments to try to dissuade Trump from imposing higher tariffs.
Mr. Reynolds told me that because the United States does not have a trade deficit with the United Kingdom, there is no need to impose tariffs.
Mr. Sefcovic said the United States should also think seriously about its services surplus.
But don’t they view threats against G7 and NATO allies Canada and Denmark (over Greenland) as downright unacceptable and as absurd as France claiming Louisiana? Sefcovic didn’t want to invent anything.
Diplomats are drawing up lists of American products that Europe can now buy to demonstrate President Trump’s “victories”, from weapons to gas to wind turbine magnets.
It might make sense for the rest of the G7 to work in unison on retaliating against tariffs, to focus the minds of Congress and competing factions within Trump’s court.
There are no signs of this happening.
The story of American technological supremacy embodied by the broligarchy – including Amazon founder Jeff Bezos, Meta boss Mark Zuckerberg, Apple leader Tim Cook and Google chief Sundar Pichar – occupied the top spots during inauguration this week.
While the United States has a head start over Europe, its position vis-à-vis China is more uncertain.
One of the topics discussed at Davos was DeepSeek’s highly capable and much cheaper AI model, made in China. The prediction that the tech brothers would tear each other apart in Trump’s court began to come true within hours, rather than months.
Meanwhile, while most, but not all, here in Davos seemed quite taken with Trump’s technological optimism, some in Europe also see a unique opportunity to attract top researchers who may not be not at all seduced by the orientation. of American politics. This was openly suggested by the President of the European Central Bank, Christine Lagarde.
Others have sought comfort in the fact that Europe no longer has to deal with Biden’s massive green subsidies, creating a more level playing field for Europe.
President Trump is changing the terms of global trade. How the rest of the world responds to this situation is as important as what the Trump administration itself decides.
January 24: The title of this story has been updated to better reflect its content.
