Every year business leaders, politicians and campaigning groups from around the world don their snow boots and $1,000 Arc’teryx Macai coats and head for the Swiss ski resort of Davos. Just as New Year follows Christmas, it’s January and time for the World Economic Forum’s annual meeting.
WEF has its fair share of critics – a hot air playground for the rich and powerful, out of touch with the realities of life on Main Street, obsessed with ‘global dialogue’ and the ‘rules-based order’. The detractors charge sheet has a familiar ring.
But when that rules-based order is itself under threat and crisis is in the air, this meeting in the mountains suddenly has a point.
After the 2008 financial crash, and with Western capitalism on the brink of seizure, the sessions buzzed as banking leaders, including Jamie Dimon, chief executive of JPMorgan, and Bob Diamond, chief executive of Barclays, clashed with presidents and prime ministers. I was in the main congress arena in 2011 when Dimon insisted that the regulatory reaction of governments had gone too far (“Too much is too much” he said) only to be slapped down by Nicolas Sarkozy, then president of France, direct from the public stage. It was a row for the ages.
I have been coming to Davos for 16 years, and this year is the most reminiscent of those post-credit-crunch flare-ups when the very fundamentals of capitalism were being questioned. This time, it is the international order and the ability of the West to hang together in the face of glaringly different approaches to an intense series of risks.
President Donald Trump, here for the first time since 2020, will dominate. On Gaza, Venezuela, Ukraine and most shockingly for Europe, Greenland, the president has thrown multiple boulders into a diplomatic sea already frothing with sharks.
At the weekend, he threatened to impose increased tariffs on those who stand in the way of the US annexation of Greenland (a self-governing island and part of Denmark)—10% now, rising to 25% in June. France, Germany, the U.K., the Netherlands, Denmark, Norway, Sweden, and Finland, who have all been critical, are his target.
“I have been coming to Davos for 16 years, and this year is the most reminiscent of those post-credit-crunch flare-ups when the very fundamentals of capitalism were being questioned…”
The European Union has responded, signaling a new trade war between two of the world’s most powerful economies. Emannuel Macron, president of France, has demanded that the EU use its ‘anti-coercion instrument’ for the first time, a trade weapon brought in to defend EU member states against Chinese tariffs in 2023. In Brussels, talk is of €93bn ($108bn) of new levies and restrictions on American companies trading in the EU. European indices are sliding. The price of gold—a hedge against market risk—has risen to new highs.
Ursula von der Leyen, the President of the European Commission, speaks tomorrow and Trump is due on Wednesday, with the largest American contingent ever to visit the World Economic Forum – including five Cabinet Secretaries and hundreds of officials. Multiple bilateral meetings aimed at finding a solution to the increasingly fraught war of words are being hurriedly arranged.
“Territorial integrity and sovereignty are fundamental principles of international law,” von der Leyen said over the weekend. “They are essential for Europe and for the international community as a whole. Tariffs would undermine transatlantic relations and risk a dangerous downward spiral.”
I was at Davos in 2017 when Xi Jinping spoke of the value of free trade. And in 2018, when Trump reassured the audience that America First did not mean America Alone. In 2026, Trump will again dominate, a president in a hurry to reshape the global order. How Europe acts now will set the tone for the rest of his presidency. Can a defense deal on Greenland be done, satisfying Trump’s demands for greater security? Will he follow through on the new tariffs? Will the EU accelerate its retaliation?
For many at the World Economic Forum this week, it seems almost preposterous to be writing such sentences. We are in uncharted territory.
