Davos elite nods as Trump delivers ultimatum

World leaders, the heads of the world’s biggest companies and a sprinkling of celebrities gathered in the small Swiss mountain town of Davos for the annual World Economic Forum this week.

Across the Atlantic, President Donald Trump is beginning his political comeback as the new President of the United States.

“Nothing will stand in our way,” he declared, as he vowed to end America’s “decline.”

Toward the end of the gathering, President Trump was broadcast live from the White House webcam to deliver his message of world domination directly to the global elite.

While he charmed, almost seduced, audiences with a plausible picture of a booming American economy that would scale new technological heights, he simultaneously threatened tariffs on those who did not choose to move their factories to the US.

Trillions of dollars in tariffs to the US Treasury on those businesses that are exported to the US market by foreign factories.

“Your prerogative,” he said, with a smile that wouldn’t be out of place in a Godfather movie. And then for one of his own, Bank of America chief Brian Moynihan, a prominent publicist, accused the lending giant of “debanishing” many of his conservative supporters.

He mumbled awkwardly about sponsoring the World Cup.

In this first week of his second term, most people in Davos are nodding off because they still can’t think of anything else to do.

Two worlds collided as America First’s president was cast as a 30-foot interplanetary emperor, in the “Beating Heart” of the rules-based international economic order.

One thing suggests that the trade deficit is a problem with your domestic electorate. It is quite another to suggest to an internationalist forum that a G7 ally, Canadabecome a state of your nation, drawing gasps from audiences and not just Canadians.

The address was by design charming and insulting. There was a carrot and a stick for the rest of the world.

As delegates swallowed the mix of threats, invitations and sometimes praise, many appeared to be trying to decide how much Trump could damage the global trading system while assessing how far ahead he is pushing in this tech boom.

Davos is for this first week the alternative pole of Trump’s second term.

There was a consensus on his agenda to use all means Reduce energy prices, including by pressuring the Saudis for oil.

This he said would not only help reduce inflation but also drain military coffers of petro dollars to help end the war in Ukraine by economic means. The Middle East ceasefire has already bought Trump some geopolitical credibility in these circles.

Christine Lagarde, David Miliband and John Kerry mingled in the hall. Various bank chiefs gathered on stage to praise and then lightly question the president.

The bottom line was this: Is President Trump serious about what sounded like campaign threats to the global economic system? The answer will be heard over the next four years and beyond.

The answer sounded like a definite yes. However, that doesn’t mean it will work.

Some top US CEOs have told me they are bracing for tit-for-tat retaliatory tariffs to be applied to their exports. Their assumption was that the president’s love of a rising stock market would limit his deployment of tariffs.

But nobody really knows. In any case, it’s up for grabs. He has already resigned from the World Health Organization.

In the Promenades, the whispers were of his 2025 Allies project, which suggested we withdraw from the IMF and the World Bank.

The rest of the world has some sort of backlash after deciding to bounce back from the Trump whirlwind.

Canadians are now informing their retaliatory tariffs. In talks with both the UK Business Secretary and EU Trade Secretary Jonathan Reynolds and EU trade chief, Maros SefovicI found a desire for calm dialogue.

Both are making similar arguments to try to dissuade Trump from broader tariffs.

Mr. Reynolds told me that since the US has no shortage of goods to trade with the UK, there is no need for tariffs.

Mr. Sefkovic said the US really needs to think about the redundancy of its services as well.

But don’t you find threats to the G7 and NATO allies Canada and Denmark (over Greenland) to be downright unacceptable and as absurd as France claiming Louisiana? Sefkovic didn’t want to beat anything.

Diplomats are drawing up lists of American goods that Europe can now buy to demonstrate “victories” for President Trump, from guns to gas to the magnets in wind turbines.

It might make some sense for the rest of the G7 to work in unison to retaliate against the tariffs to focus the minds of Congress and rival factions inside Trump’s Court.

There are no signs of this happening.

The history of American technological supremacy epitomized by the Broliarchy – iAmazon founder Jeff Bezos, meta boss Mark Zuckerberg, Apple leader Tim Cook and Google chief Sundar Pichar – I had the best seats at the inauguration this week.

While the US is streets ahead of Europe, its position against China is more precarious.

One of the talking points for Davos was the high quality, much cheaper AI model made in China. The prediction that the tech bros would tear ribbons apart in the Trump Court began to come true within hours, not months.

Meanwhile, while most, if not all, here in Davos sounded quite seduced by Trump’s optimism, some in Europe also see a once-in-a-lifetime opportunity to attract top researchers who may be less than enamored of the direction from the US policy. It was openly proposed by the head of the European Central Bank, Christine Lagarde.

Others took solace in the fact that Europe no longer had to face Biden’s massive green subsidies, once again creating a more level playing field for Europe.

President Trump is changing the terms of world trade. The reaction of the rest of the world to this is just as important as what the Trump administration decides.

January 24: The title of this story has been updated to better reflect its content.