This is the first year since I stopped attending the World Economic Forum in Davos in 2012 that I wished I was there. (I was a regular for over 15 years—mainly in my Morgan Stanley capacity and then as part of the Davos “faculty” when I moved to Yale; for those who might be interested, my Davos swan song can be found here). Despite its reputation as a global gathering, Davos has always been a Euro-centric event. The WEF provided a platform for many of us to engage our European counterparts in open and vigorous debate. I found the event to be a great source of intellectual and personal satisfaction.
I wish I was there this year because US President Donald Trump and his MAGA entourage will be there to confront the Europeans over the critical issue of territorial integrity. I want to see first-hand if European leaders have the courage to do what American leaders have not done—challenge the growing insanity of a power-hungry American president. Trump, of course, has just threatened tariffs of 10% (February 1) rising to eventually 25% (June 1) on eight European countries, after having struck a trade deal with the EU only several months ago. This is nothing short of coercive blackmail for their failure to endorse his Greenland land grab. This latest act not only underscores the lack of trust that anyone should have in a Trump deal, but it is yet another in a long string of Trumpian attempts to humiliate many of America’s closest allies.
Trump, of course, claims that it’s all about national security, the same excuse he has used to invoke earlier Section 232 tariffs against Canada and Mexico, America’s closest neighbors who had previously agreed to rewrite the NAFTA agreement as the USMCA in Trump’s first term. National security has become the raison d’être for countries to do whatever they want to justify actions against other nations, without revealing so-called delicate secrets of state.
For Trump, the Greenland deal is apparently about securing the real estate required to make his highly questionable “Golden Dome” anti-missile project operational. He resents that this “very brilliant and highly complex system” could be stymied by ungracious Europeans, “despite that all we have done for them… over so many decades.”
French President Emmanuel Macron, who will also be in attendance at Davos this week, has urged the EU to activate its so-called big bazooka—a powerful anti-coercion instrument that allows retaliatory trade restrictions on the coercer, in this case Trump and the United States. Ursula von der Leyen, President of the European Commission, has threatened to hold up ratification of the earlier struck trade deal with the US. Similar negative reactions have come from Italian leader and Trump whisperer, Giorgia Meloni, UK Prime Minister Keir Starmer, European Council President, Antonia Costa, and most other European leaders. All of them are expected to be in Davos this week.
The big elephant in the room is, of course, NATO—an alliance borne out of the tragic devastation of World War II that has been essential to guarantee world peace and security for now over 75 years. NATO’s Article 5, which views an attack on one member as an attack on all, is an obvious counter to Trump’s audacious threat to take Greenland “the easy way (an all-cash deal) or the hard way (the military option).” Led by Denmark, long one of America’s most loyal allies, several European nations are already deploying military forces to Greenland to prevent Trump from acting on his tough talk of the hard way.
Emboldened by the success of a brilliant military operation in Venezuela and having just been “gifted” the Nobel Peace Prize by leading Venezuelan dissident, Maria Machado, Trump, in effect, is going out even further on his skis. (FWIW, I would pay money to see him try the slopes of Davos). He is making the dubious and risky presumption that Greenland is more important for America’s national security than is NATO. This only underscores the most vacuous and dangerously irresponsible aspects of “America First.” Alliances mean absolutely nothing to Donald Trump.
Trump’s latest efforts to use tariffs as an instrument of blackmail are, of course, nothing new. Any day the Supreme Court of the United States is expected to weigh in on one of Trump’s key justifications for recent tariff actions, imposing them on the basis of a so-called international economic emergency. While there are strong merits to this case—namely, that trade deficits are mainly a macroeconomic “emergency” of America’s own making—most of us have come to expect the worst from the highest court of the US. For a SCOTUS that has bent over backwards to expand the meaning of presidential immunity, I fear that it will be equally compliant when it comes to tariffs. Do European leaders have more courage than America’s Supreme Court to stand up to an autocratic US president?
In my day, Davos was at its best when the debates were vigorous and intense. From what I gather, the panels have become more politically correct in recent years as the level of corporate support has risen. This year’s theme, “A Spirit of Dialog,” is a watered-down version of the engagement I was privileged to be a part of in years past. Will this week’s attendees have the spine to resurrect the spirit of the Old Davos? I wish I was there to see for myself.