President Donald Trump’s arrival at the World Economic Forum in Davos, Switzerland, has been overshadowed by escalating tensions with European allies over his unprecedented territorial ambitions. The American leader’s push to acquire Greenland from Denmark through coercive tariff threats has fundamentally altered the diplomatic atmosphere at this gathering of global elites.
Trump departed for the Swiss Alps just hours after imposing a 10% tariff on Denmark and seven other NATO allies, with plans to escalate these punitive measures to 25% by June unless negotiations regarding Greenland’s transfer commence. This aggressive economic stance directly contradicts the administration’s stated objective of addressing domestic affordability concerns during the forum.
European leaders responded with remarkable unity against what they perceive as economic blackmail. French President Emmanuel Macron, without directly naming Trump, denounced the acceptance of “the law of the strongest” in international relations. European Commission President Ursula von der Leyen delivered a more pointed warning, emphasizing that the EU’s response would be “unflinching, united and proportional” should the tariffs proceed.
The controversy has already reverberated through financial markets, with Wall Street experiencing significant declines as investors weighed the potential collapse of the US-EU trade framework established just months earlier. The S&P 500 recorded its largest single-day drop since October, falling 2.1% amid the uncertainty.
Complicating matters further, Trump’s travel to Davos encountered operational difficulties when Air Force One experienced electrical problems shortly after departure, forcing the aircraft to return and delaying the president’s arrival in Switzerland.
The administration’s planned focus on housing affordability and economic issues appears increasingly disconnected from both the forum’s elite setting and the brewing diplomatic crisis. Economic analysts warn that undermining investor confidence through trade wars could ultimately increase interest rates, contradicting Trump’s stated goal of making homeownership more accessible.
Additionally, Trump plans to promote his controversial “Board of Peace” initiative during the forum, though the proposal has garnered limited international support, with several key European allies declining participation in the alternative to United Nations diplomacy.