Trump Faces European Backlash Over Greenland at Davos Summit
Finn's Take· TL;DR- Trump's tariffs on eight European nations supporting Denmark over Greenland trigger rare unified EU response and consideration of retaliatory trade measures.
- Denmark absent from Davos summit; European leaders warn escalating tensions risk dangerous downward spiral in transatlantic relations and stability.
- Trump's housing affordability speech overshadowed by Greenland crisis; approval ratings on cost-of-living plunge as proposals fail to address core concerns.
Greenland Crisis Overshadows Economic Forum
The World Economic Forum in Davos has transformed into an emergency diplomatic summit as President Donald Trump's aggressive push to acquire Greenland triggers the most serious transatlantic crisis in decades. Trump's demands to take over Greenland are transforming this week's annual gathering of the global elite into an emergency diplomatic summit, as European leaders prepared to use the president's arrival here Wednesday to de-escalate the spiraling crisis.
What began as Trump's latest territorial ambition has escalated into open economic warfare. Trump announced new 10% tariffs on all goods from eight nations -- Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland -- that sent troops to Greenland in a show of solidarity with Denmark. The tariffs, set to begin February 1, will increase to 25% by June unless the U.S. can purchase the Arctic territory.
Danish government representatives were invited and decided not to attend, a WEF spokesperson said on Monday, as the dispute over Greenland intensified. The absence of Denmark at what organizers call the largest-ever World Economic Forum speaks volumes about the deteriorating relationship between longtime allies.
European Unity Against American Pressure
European leaders have responded with rare unity and sharp warnings. EU ambassadors met in Brussels and issued a rare joint statement reaffirming their solidarity with Denmark and the people of Greenland, saying tariffs only undermine transatlantic relations, and they warned there is a risk of a dangerous downward spiral. European Commission President Ursula von der Leyen declared "The proposed additional tariffs are a mistake."
The European Union is now considering deploying its most powerful trade weapon -- the Anti-Coercion Instrument, nicknamed "the bazooka." It allows the EU to take action against perceived economic coercion by a third party with its own retaliatory measures. This means the EU could restrict American companies to its huge market. The irony is stark: this measure was originally derived to be used against China, not the EU's greatest ally.
French President Emmanuel Macron captured European frustration in a private message Trump later made public: "I do not understand what you are doing on Greenland." Canadian Prime Minister Mark Carney delivered an even sharper rebuke without naming Trump directly: "Let me be direct: We are in the midst of a rupture, not a transition. Great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited."
Housing Policy Lost in Diplomatic Chaos
Amid this international turmoil, Trump's original plan to focus on housing affordability has been largely forgotten. President Donald Trump plans to use a key address Wednesday to try to convince Americans he can make housing more affordable, but he's picked a strange backdrop for the speech: a Swiss mountain town where ski chalets for vacations cost a cool $4.4 million. The optics couldn't be worse for a president whose approval ratings on affordability have plummeted.
About six in 10 U.S. adults now say that Trump has hurt the cost of living, according to the latest survey by the Associated Press-NORC Center for Public Affairs Research. Only 16% say Trump has helped "a lot" on making things more affordable, down from 49% in April 2024. Even Republicans express disappointment with his economic performance compared to campaign promises.
The housing proposals Trump may announce include encouraging Fannie Mae and Freddie Mac to expand their purchases of mortgage-backed securities (MBS), banning large institutional investors from acquiring single-family homes, and allowing savers to tap 401(k) funds penalty-free for use as a down payment. However, these measures pale in significance compared to the diplomatic firestorm consuming his presidency.
A Forum Transformed by Crisis
The stakes at Davos extend far beyond trade disputes. Davos organizers are keen to talk up the numbers they expect to attend — "close to 3,000 cross-sector leaders," plus a "record" 400 political leaders, 850 top company bosses and 100 tech pioneers. Yet the traditional focus on economic cooperation has been overshadowed by Trump's territorial ambitions and threats of military force.
Trump's broader foreign policy agenda adds another layer of complexity. The "Board of Peace" is being created as part of Trump's 20-point plan to end the conflict between Israel and Hamas and has come under sharp criticism. A copy of the charter obtained by NPR said that countries that want permanent membership will have to pay $1 billion, and that Donald Trump is the permanent chair, even after he's president.
As European leaders gather to contain the damage from Trump's Greenland obsession, the World Economic Forum faces a fundamental question: Can the international order survive when its most powerful member treats allies as adversaries? The answer may determine whether Davos represents the last gasp of multilateral cooperation or the beginning of a new era of economic nationalism. What happens in the Swiss Alps this week could reshape global diplomacy for years to come.