Closing post
European leaders have lined up to condemn Donald Trump’s “new colonialism”, on the first full day of the World Economic Forum in Davos.
They warned that the continent was facing a crossroads as the US president said there was no going back on his goal of controlling Greenland.
After weeks of aggressive threats by Trump to seize the vast Arctic island, which is a largely autonomous part of Denmark, Emmanuel Macron, the French president, said on Tuesday he preferred “respect to bullies” and the “rule of law to brutality”.
Macron told WEF that now was “not a time for new imperialism or new colonialism”, criticising the “useless aggressivity” of Trump’s pledge to levy tariffs on countries that opposed a US takeover of Greenland.
The US was seeking to “weaken and subordinate Europe” by demanding “maximum concessions” and imposing tariffs that were “fundamentally unacceptable – even more so when they are used as leverage against territorial sovereignty”, he said.
Macron was speaking after European Commission president Ursula von der Leyen told WEF that Europe must strengthen its independence.
Von der Leyen also pledged an “unflinching, united and proportional” response to Trump’s tariff threat.
She was followed by Chinese Vice Premier He Lifeng, who warned against allowing the international order to sink into a “law of the jungle”.
But Canada’s Mark Carney told Davos that the world’s ‘middle powers’ need to work together to build a better world order.
He said:
“It seems that every day we are reminded that we live in an era of great power rivalry. That the rules-based order is fading.”
Carney warned that the world faces “the end of a pleasant fiction and the dawn of a harsh reality of geopolitics” in which the great powers are unconstrained.
He also said Canada stood with Denmark and Greenland.
Rachel Reeves, the UK chancellor of the exchequer, told an event in Davos that she would urge everyone to keep cool heads over the US threat of new tariffs.
The day began with US treasury secretary Scott Bessent urging Europe not to retaliate against Trump’s threat of 25% tariffs if they oppose his acquisition of Greenland.
Bessent said countries and companies should pause and “let things play out”, and accused the media of hysteria for reporting that Europe coud retaliate by selling their holdings of US government debt.
We’ll be back tomorrow morning, when Donald Trump will deliver a special address to Davos….
Updated
Davos attendees should note that the European parliament will freeze ratification of the EU-US trade deal in response to Donald Trump’s tariff threats to European countries who oppose his takeover of Greenland, my colleague Jennifer Rankin reports from Brussels.
The European parliament had been due to vote in the coming weeks on introducing 0% tariffs on US industrial goods, a key part of the deal signed between Ursula von der Leyen and Donald Trump at his Turnberry golf course in Scotland last summer.
Senior MEPs on the European parliament’s international trade committee are expected to announce the formal suspension of ratification of the Turnberry deal on Wednesday, following a deal between the largest political groups, a European parliament source said.
The writing was on the wall after the leader of the European parliament’s largest political group, the centre-right European People’s Party, announced over the weekend that approval of 0% tariffs for the US must be put on hold. “The EPP is in favour of the EU–US trade deal, but given Donald Trump’s threats regarding Greenland, approval is not possible at this stage,” Manfred Weber said after Trump’s X announcement.
Socialists, centrist MEPs and Greens had already called for the deal to be put on hold over Trump’s threats to Greenland. ENDS
Another punchy quote from Mark Carney today, as he warned that the “rules-based international order” was over:
“Middle powers must act together because if you are not at the table, you are on the menu.”
Finnish president predicts Greenland crisis will be defused soon
Finland’s president Alexander Stubb predicted that the Greenland crisis will likely be “defused” by the end of the week.
In an interview on Bloomberg Television here in Davos, Stubb said:
“The latest conversations that I’ve had about this subject in the past two to three hours — this is how fast things are changing in the new foreign-policy world — give me a little bit of hope that we’ll find a way.”
The BBC’s Faisal Islam has captured the essence of Mark Carney’s speech here:
PM Mark Carney implores the world’s middle powers to follow Canadas example:
— Faisal Islam (@faisalislam) January 20, 2026
“the old order is not coming back”… “nostalgia is not a strategy”…“There has been a rupture” in the world…”
replaced by “a system of intensifying great power rivalry with the most powerful pursue…
Carney: Trump's Board of Peace needs some work
Q: Will Canada be joining Donald Trump’s Board of Peace?
Carney says, diplomatically, that work is needed on the structure of the vehicle.
In Canada’s view, he says, it could be better designed to address the immediate needs of Gaza, and needs to be coordinated with the full flow of aid into Gaza.
Delicately, he adds that there are elements of the governance process that could be improved.
Q: Will Canada be paying $1bn for permanent membership?
We would write cheques and deliver in kind to improve the lives of the people of Palestine, Carney replies, emphasising that Canada is committed to a two-state solution to the issue.
Q: Is there an offramp in the Greenland crisis?
There is a better outcome that can come from the discussions that have been catalysed, in an unusual way, Carney replies.
He adds that Canada is four-square committed to improving security of the Arctic, and working with Nato to achieve it.
Carney adds that Russia is, without question, a threat in the Arctic, saying:
They are a real threat in the Arctic, one we need to protect against.
They are more of a prospective threat than actual one, and we intend to keep it this way, he adds.
Carney: Canada strongly opposes tariffs over Greenland
Mark Carney then throws his country’s weight behind Denmark and Greenland over the row with Donald Trump.
He tells Davos that Canada stands firmly with Greenland and Denmark, adding that its commitment to NATO’s Article 5 (mutual protection) in “unwavering”
Carney adds that Canada strongly opposes tariffs threatened on European countries over Greenland, and calls for focused talks to address the issue.
Updated
Carney: We are entering the beginning of a 'harsh reality'
Back in the WEF congress hall, Canadian prime minister Mark Carney is delivering the final special address of the (rather long) day.
Carney begins by telling his audience, in French, that it is “a pleasure and a duty to be with you at this pivotal moment” that Canada and the world are going through.
And then he drops the hammer, saying we are experiencing:
The end of a pleasant fiction and the beginning of a harsh reality.
Carney says:
It seems that every day we are reminded that we live in an era of great power rivalry. That the rules-based order is fading.
He says it is reminiscent of the famous quote from ancient Greek historian Thucydides, that the strong do what they can, and the poor must suffer what they must.
Faced with this logic, there is a temptation for countries to comply to buy safety, he says, but warns that it won’t work.
He cites an essay from Václav Havel, the Czech dissident, from 1978 called the power of the powerless, asking how did the communist system sustain itself.
That essay explained how a shopkeeper put up a sign declaring “Workers of the world, unite!”, even though he didn’t believe it.
Taking it down undermined the communist system,
To applause, Carney declares:
Friends it is time for companies and countries to take their signs down.
He then explain that, for decades, countries such as Canada prospered under the rules-based global order.
It allowed them to pursue values-based foreign policy under its protection.
But Carney says, we always knew that the story was partly false, confessing:
We participated in the rituals, and avoided calling out the difference between rhetoric and reality.
He then explains how crisis in finances, health, and geopolitics have led to a situation where great powers are using economic tools as weapons.
And, he warns, that the archicture of collective problem-solving, from the WTO, to the UN, to COP – is under threat.
Middle powers, he says, have the most to lose from a world of fortresses and the most to gain from co-operation.
We know that the old world order is not coming back, Carney insists.
But he also warns that the great powers would run risks by abandoning the old world order, saying one-time allies will be forced to diversify.
“Hegemons cannot continually monetise their relationships”.
Updated
You can watch Rachel Reeves, Howard Lutnick et al here:
Canadian finance minister François-Philippe Champagne also touches on trade tensions with the US, pointing out that the two countries share a continent, and been trading for a long time
We’ve built that integration. Within that, we need to build more resilience within the system, he explains, adding:
“What we’re facing now is a rupture point, where we need to change the future together.”
Rachel Reeves has hotfooted it from Bloomberg’s Davos area into the main congress centre, to appear on a panel here.
She’s alongside Canadian finance minister François-Philippe Champagne, US commerce secretary Howard Lutnick, Bank of America CEO Brian Moynihan, and EY CEO Janet Truncale.
Lutnick takes the first delivery from historian Adam Tooze, who is chairing the session, comparing Lutnick’s “ebullience” and “dynamism” with his admission that he is the “hammer”, as he’ll hit people with 100% tariffs if they don’t do what we want.
Q: How do you think people, such as the government of Denmark, react?
Lutnick takes a wider view, explaining that globalisation has failed the US – it left America behind, and left American workers behind.
He argues that the basis of the America First movement is that you should not be dependant on another country for anything that is important to your sovereignty (and if you are, they’d better be your best friends).
Taking a pop at Davos, Lutnick says he views WEF “not as a flagpole in the middle, but the flag”, that was buffeted by trends.
He says it’s a mistake that Europe committed to net-zero policies that rely on technology from China.
Lutnick explains:
America First is the job of our government, to take care of our workers.
That policy is something other countries should consider too – to take care of their own.
And he insists “When America shines, the world is brighter.”
Q: What about Greenland?
Lutnick says the Western Hemisphere is vital to the US, and its national security people are on the case.
He says:
Western Hemisphere is vital to the USA…. and the United States of America really really matters to the world.
Reeves agrees that the world would be poorer and scarier without the US.
But in a defence of the Special Relationship, she says that the UK is probably the US’s closest allies.
Perhaps pricked by this, Lutnick replies “We love you, we do”.
The feeling is mutual, Reeves replies, before pointing out that the US is currently rather dependent on China for its rare earth minerals.
The most important thing, Reeves tells Bloomberg’s session here at Davos, is to improve trading relations with the UK’s nearest neighbours – namely Europe.
The chancellor says this was damaged after the vote to leave the EU almost a decade ago, adding “we are now fixing that mess”.
Q: So could the UK rejoin the customs union, as some MPs want?
No, that’s not on the cards, Reeves replies, saying Labour was very clear on this in its last manifesto.
She points out that the government has brought back the Erasmus scheme, making it easier for UK students to study in Europe (great news for young people, but it won’t fix trade friction at the border, alas).
Updated
Rachel Reeves is then asked if Donald Trump’s recent attacks on the US Federal Reserve could hurt the UK.
She replies that people understand that the UK, with her as chancellor, have huge respect for independent institutions, both central banks and the UK’s Office for Budget Responsibility.
Previous governments undermined those institutions, she says (a reminder that Liz Truss sidelined the OBR before her disastrous mini-budget of 2022).
Asked about Labour’s chances at the next election, Reeves points out that Labour won “a massive majority” 18 months ago.
She insists she’s confident that people will see benefits as the government’s plan to grow the economy, and bring in investment, pays off and inflation returns to target.
Updated
Reeves: Keep cool heads over tariff threat
Rachel Reeves, the UK chancellor of the exchequer, is now speaking at a Bloomberg session just outside the WEF congress centre.
Asked about the tariff threats from the US, Reeves says that she would urge everyone to keep cool heads.
The chancellor cites the trade deal between the US and UK which has brought down tariffs (although Trump is threatening to put them up again, and that deal was actually frozen in December).
She also points to other trade deals either signed off or under negotiation, such as with India and South Korea.
Reeves tells her audience:
I believe in free and fair trade.
Insisting there are benefits for businesses and consumers from open economies, she adds:
I want Britain, even in a world where others are putting up barriers to investment, trade and talent, to be bring them down.
She then cites the visa shake-up announced overnight.
Updated
Just the threat of new tariffs over the Greenland crisis is distorting global supply chains, according to Andrei Danescu, CEO of UK-based warehouse logistics firm Dexory.
Danescu explains:
US-bound imports are slowing as companies pause orders, stockpile critical components and rush deliveries, triggering customs delay and warehouses filling with the wrong stock, in the wrong place, at the wrong time.
This is the commercial reality behind renewed tariff threats against the UK and EU and the broader use of economic and territorial pressure. The message to business is clear: geopolitics now overrides efficiency.
For UK manufacturers and retailers, especially in automotive and consumer goods, the impact is immediate. Predictable delivery rhythms will break, forcing many to over-order or risk stoppages. ‘Just in time’ becomes ‘just in case’, tying up cash and warehouse space.
The lesson is simple: tariffs destabilise supply chains and, in an economy already running hot, uncertainty is its own tax. All organisations can do now is prioritise warehouse visibility to inform decision making.
Updated
Jennifer Jacobs of CBS News has spotted that California governor Gavin Newsom slipped into Scott Bessent’s event….
Dem likely presidential candidate @GavinNewsom slid into a last-minute open seat in Trump Treasury Secretary Scott Bessent's remarks at Davos -- and happened to be seated right next to @SecScottBessent's staff. Newsom took notes and silently scoffed at some of Bessent's comments,… pic.twitter.com/ZPp4WqeSHJ
— Jennifer Jacobs (@JenniferJJacobs) January 20, 2026
I couldn’t quite see who Emmanuel Macron was greeting at the start of his speech – the answer is King Philippe and Queen Mathilde of Belgium….
…plus Serbia’s president Aleksandar Vucic, and European Central Bank president Christine Lagarde.
Updated
Bessent predicts: 'very substantial tax refunds' for US workers
No sooner had Emmanuel Macron concluded his speech than treasury secretary Scott Bessent popped up in a session to discuss the US economy.
You can watch it here:
Blowing the trumpet for Donald Trump’s economic agenda (as he did this morning), Bessent said the US president’s tax deals, trade deals, and deregulation are all helping – deregulation, the most powerful part, just starting to kick in, he says.
Bessent also predict that “very substantial tax refunds” are coming to working Americans in the first quarter of the year.
[This, I think is due to the retroactive effects of the July 2025 “One Big Beautiful Bill Act,” which included tax cuts for overtime, tips, and Social Security. US workers who didn’t adjust their withholdings (the amount employers deduct from paychecks for federal income), will qualify for a refund].
This could run up to $1,000 per wage earner, Bessent says.
Updated
Summing up the challenges for 2026, French president Emmanuel Macron says it important not to be shy, not to be divided, and not to accept a new global order by those who claim to have the biggest voice.
There are three priorities, he insists – growth, peace and climate (an issue which has not been top of the agenda yet this week).
Macron insists:
We should not forget climate in the current agenda.
His session has now concluded, to a warm-sounding round of applause.
Macron: crazy that we could use anti-coertion tool against US
Emmanuel Macron rounds off his speech with another rallying cry.
He tells Davos that more growth, and more stability, is needed.
And he declares “we do prefer respect over bullies”, and prefer respect for the rule of law over brutality.
Then, taking questions, Macron says he would like to dismantle the existing tariffs between the US and Europe, as it doesn’t make sense to have tariffs between allies.
It doesn’t make sense to threaten allies with additional tariffs, Macron adds – a clear reference to Trump’s Greenland threats.
He says this could lead to Europe using its Anti-Coercion mechanism – a powerful tool that allows the EU to impose punitive economic methods – for the first time
Can you imagine that, it is crazy, Macron says, adding that he does regret that the anti-coercion tool is now on the table, but that is a consequence of the current instability.
Macron then praises Europe, despite its economic problems.
He says you know that if somewhere is “predictable, loyal, and you know that the rule of the game is just the rule of law, it is a good place, for today and tomorrow.”
Macron then pushes for more investment in areas where innovation is taking place, such as AI and clean energy.
The EU common budget is not large enough, he suggests, to help Europe compete in these key sectors.
There also isn’t sufficient private investment, the French president adds. He points out that Europe does have savings, more than the US, but much is invested in bonds and equities outside Europe.
Macron: Europe must restore level playing field and protect itself
Europe has to fix its key issues, Macron continues, citing the lack of growth, and the lack of GDP per capita growth.
European competitiveness still lacks behind that of the US, he points out.
And he then calls for tougher action by Europe to protect its companies and markets, insisting that “protection does not mean protectionism.”
Macron warns that some European industries are being “literally killed” by the lack of respect for a level-playing field, and suggests there is a case for “European preference” to support its domestic industry…
…and capital market union to spur investment.
He says:
Europe are the only ones not to protect their own companies and their own markets when other countries do not respect a level playing field.
Europe must strengthen its protections against dumping of products from overseas, and more overseas investment, to help rebalance with China.
Updated
Accepting a new colonial approach doesn’t make sense, Emmanuel Macron continues, suggesting that we cannot accept a world where the law of the strongest hold sway.
Passively accepting a new subordination does not make sense, he adds.
Macron warns of 'unacceptable' accumulation of US tariffs
Emmanual Macron begins his speech to Davos by joking that “This is a time of peace, stability and predictability”….
…before warning WEF that it is clear that we are reaching a time of instability, of inbalances.
That is from both a security point of view, and an economic point of view, he says.
Update: Macron warns:
“It’s ... a shift towards a world without rules, where international law is trampled underfoot and where the only law that seems to matter is that of the strongest.”
Macron says that there were more than 60 wars in 2024, even though “I understand some of them were fixed” (a jibe at Donald Trump’s claim to have ended several wars?).
Macron then declares that it is”unacceptable” when competition with the US aims to subordinate Europe, especially when it is being used as leverage to obtain territory (ie Greenland…).
Update: He warned of (via LeMonde)
“an endless accumulation of new tariffs that are fundamentally unacceptable – even more so when they are used as leverage against territorial sovereignty.”
Updated
Now it’s Emmanuel Macron’s turn to take to the stage at Davos.
Earlier the French president was spotted sporting a pair of sunglasses inside the congress centre here in Davos, having recently suffered an eye condition (reported to be a burst blood vessel).
He’s wearing them again now, as he gladhands various bigwigs in the front row of the audience, before being introduced by Larry Fink who is talking about his love of France.
Fink says that the economic debate in France has changed over the last decade; there is broad agreement today that economic growth matters, he says, and he gives Macron the credit.
You can make an argument that no French leader has led his country at a more pivotal time since World War 2, Fink suggests.
Updated
French president Emmanuel Macron and Canada’s prime minister Mark Carney have met inside the WEF congress centre this lunchtime:
Harvard economist Kenneth Rogoff says European governments are really worked up over Trump’s threat to impose new tariffs over support for Greenland.
Rogoff said today:
“It’s no accident he did this just before coming here and got the Europeans all riled up. Suck all the oxygen out of the room so everyone would be talking about nothing else.”
The governor of California, Gavin Newsom, called Europe’s reaction to Trump “pathetic” and “embarrassing” and urged European leaders to unite and stand up to the United States.
Newsom told reporters at Davos, via Associated Press:
“It is time to get serious, and stop being complicit,”
He also decried the chasm between what Europeans are saying in public to Trump versus what they say privately among themselves.
“This guy’s playing folks for fools,” Newsom said:
“I mean, everybody’s talking behind his back. They’re laughing at him, and meanwhile, they’re sucking up to him.”
According to Bloomberg, Newsom also produced an eye-catching analogy:
“There’s no diplomacy with Donald Trump -- he’s a T-Rex, you mate with him or he devours you.”
Donald Trump’s dream of a grand signing ceremony in Davos for his “Board of Peace” — with the president at the helm and a $1 billion membership fee — is melting away today, Bloomberg reports.
They say:
With widespread concern that the Trump administration is assembling a rival outfit to the United Nations, the list of fellow Group of Seven leaders who are politely declining the invitation is growing. Trump wasted no time in venting his anger at them one by one.
That included Trump threatening France with 200% tariffs on champagne, and roasting UK prime minister Keir Starmer over the decision to cede the Chagos Islands to Mauritius.
Correction corner: The Nixon shock which preceeded the first WEF annual meeting in Davos was, of course, in 1971 not 1961 as I mistyped earlier. Apologies!
Updated
BoE’s Bailey: Must be “careful” what we do to support US Fed independence
MPs have grilled Bank of England governor Andrew Bailey about another Trump target: US Federal Reserve chair Jerome Powell.
Powell is facing a criminal investigation by the US DoJ over alleged “abuse of taxpayer dollars” linked to renovations to the central bank’s HQ in Washington, which is widely suspected to be punishment for not cutting interest rates as fast as Trump would like.
Policymakers and CEOs have since started rallying around the Fed, raising concerns about threats to central bank independence.
That includes Bailey, who last week signed a letter of support for Powell alongside nine counterparts, including the European Central Bank’s Christine Lagarde, and Michele Bullock of the Reserve Bank of Australia.
When asked about his support for Powell, Bailey told the Treasury Committee on Tuesday that while it was not his place to “intervene” in domestic US issues, there were particular concerns for how this was affecting the US dollar as the world’s reserve currency.
He told MPs:
So it is pretty unprecedented for other central bank governors to to do this [send a letter],but I think it’s you know, it’s a point that we have to make in this situation.
But…we have to be careful what we do.
I will say also – because Jay Powell is a close colleague and a friend of mine - I’ve said before in public and I’ll say it again, he is, in my view, a man of the utmost integrity.
Nadella: AI needs to show it is delivering positive outcomes
Satya Nadella, the chief executive of Microsoft, who was interviewed by BlackRock CEO Larry Fink on stage at Davos this morning, warned that AI could lose public support, if it cannot show that it is delivering positive outcomes, well beyond the tech sector.
“I would say you lose even the social permission to take something like energy, which is a scarce resource,” to power AI, he told WEF, if it is not “improving educational outcomes, public sector efficiency, private sector competitiveness - across all sectors, small and large. That, to me, really is the goal.”
He added that in the near future, what he called the “token factories” - the datacentres - that underpin the technology, will be “diffused all around the world, like electricity”.
Asked whether current elevated valuations for the big tech firms represent a bubble, as many analysts have warned, Nadella said, “for this not to be a bubble, by definition, it requires that the benefits of this are much more evenly spread. A tell tale sign of this as a bubble, is if all we’re talking about are the tech firms.”
Instead, he said, a sign that AI investment will deliver, would be if instead of the tech firms, debate turns to real-world examples, such as, “here is a drug that was brought into the market, that’s super-successful because AI accelerated the clinical trial”.
China’s vice-premier He Lifeng, has followed Ursula von der Leyen onto the Davos stage, and made a pitch for multilateral co-operation.
He tells delegates here that the future of the world hinges on cooperation, and the most effective way to achiece that is through solidarity.
In an apparent reference to the White House, He says solving problems together is more effective than pointing fingers.
He says China welcome countries who want to reach trade agreements, but not at the expense of third parties.
China, of course, has long been a target for Donald Trump due to its large trade surplus with America.
He insists that China never purposefully pursues a trade surplus (!), and says it is willing to vigorously expand its imports – to become not only the factory of the world, but also the world’s market.
He also tells WEF that the world must not return to the “law of the jungle where the strong bully the weak” (which might be a relief to Taiwan!).
And in a flowery conclusion, He calls on Davos delegates to work together to steer the world economy through the “vast blue ocean”, breaking through all winds and waves.
Updated
Bank of England's Bailey: We 'have to remain very alert' amid Greenland threats
Bank of England governor Andrew Bailey said officials “need to remain very alert” to how rising geopolitical tensions could threaten financial stability, amid growing concerns over Trump’s threats to annex Greenland.
Bailey did not directly respond to questions about Greenland, referring instead to how the Bank’s December financial stability report said risks to financial stability had increased over the past year.
He told the Treasury Committee:
I do think that geopolitical tensions and particularly trade issues, are an important part of that.
Now, that does not mean to say that I want say that any particular issue is trigger.
But the level of geopolitical uncertainty, and the level of geopolitical issues, is obviously a big consideration because they can have financial stability consequences.
Bailey said that while financial markets and global economic growth were more stable than expected given the events of the past year (think Trump’s previous tariff threats), he warned that did not suggest the same would happen going forward:
Neither of them I take as a source of any assurance going forward.
We have to remain very alert to these things.
Updated
Von der Leyen: Greenland tariff threat is a mistake, a deal is a deal
Turning to the Greenland crisis, EC president Ursula von der Leyen declares that “tariffs are a mistake, particularly between long-term allies”.
She reminds Davos that the US and Europe reached a trade deal last year.
In a nod to President Trump, as he jets towards Davos, von der Leyen says:
In politics as in business, a deal is a deal.
And when friends shake hands, it must mean something.
Von der Leyen adds that Europe considers the people of the Uniter States not just our allies, but our friends.
Plunging us into a downwards spiral would only help the adversities we are both committed to keeping out of the strategic landscape, she warns.
And Europe will be “unflinching, united and proportional” in its response, she insists.
Von der Leyen then explains that Europe is working on a package for arctic security.
It will have three points:
that the soverienty of Greenland and Denmak is non-negotiable
a massive investment surge in Greenland.
work with the US on wider Arctic security, which she says is in both sides’ joint interest.
Von der Leyen then pledges that Europe will work with its regional partners to strengthen their combined security; including UK, Canada, Iceland and others, as it adjusts to a new security architecture.
Updated
Turning to the Ukraine war, Ursula von der Leyen says Russia shows no sign of abating, no sign of remorse, no sign of seeking pace – just the contrary.
Last week’s bombing of Ukraine’s energy infrastructure left millions facing darkness, cold, and food shortages.
She declares, to applause:
This must end.
We all want peace in Ukraine, von der Leyen continues, saying Europe recognises president Trump’s role in pushing peace talks forward.
Ukraine must be in a position of strength to go to the negotiating table, she adds, which is why the EU agreed a €90bn loan.
The hall here at Davos is pretty packed to hear from the European Commission chief:
One of the biggest beneficiaries of attention from an erratic Trump may be the EU. I’ve never seen Davos’ congress hall so crowded for a WEF special address by Ursula von der Leyen. #WEF26 pic.twitter.com/w3duiv1Mvc
— Holger Zschaepitz (@Schuldensuehner) January 20, 2026
Europe 'on cusp' of historic trade deal with India
On trade, Ursula von der Leyen points to the Mercosur trade deal agreed with South America.
Mercosur shows the EU is serious about free trade, to derisking our economies and diversifying our supply chains, she says.
And she then declares that Europe is on the cusp of a historic free trade agreement with India, but there is still work to do.
Von der Leyen says she will visit India next week, telling Davos:
“There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals.
One that would create a market of two billion people, accounting for almost a quarter of global GDP.”
Von der Leyen tells Davos: We must build stronger European independence
European Commission president Ursula von der Leyen is now giving a special address to Davos – you can watch it at the top of this blog.
Von der Leyen starts by saying the world has transformed completely since the first WEF annual meeting in 1971 (corrected!).
She applauds this year’s theme, “A spirit of dialogue”, saying it is:
All the more important in a world that is more fractured and more fractious than ever.
1971, she reminds us, was the year of the Nixon shock when the then US president broke the link between gold and the dollar – (ending the Bretton Woods system of fixed exchange rates created after the second world war).
That move, although disruptive, resulted in a new global order, and “a sharp lesson to Europe to reduce their dependencies”, she says.
The world may be very different today, von der Leyen adds, but she believes the lesson is very much the same – that “geopolitical shocks can and must serve as an opportunity”.
The seismic changes taking place today means it is a “necessity” to build a new form of European independence, von der Leyen adds.
She denies this is a reaction to recent events; actually it’s been an imperative for some time.
If this change we are seeing today is permanent, then Europe must change permanently too, von der Leyen insists, declaring it is time to seize this opportunitty and build a new independent Europe.
Updated
“Protectionism is on the rise around the world,” warns Guy Parmelin, President of the Swiss Confederation, as he welcomes WEF delegates to this year’s meeting.
In the WEF congress hall, interim co-chairs Larry Fink and André Hoffmann are delivering welcoming remarks.
It’s not going completely smoothly, Hoffmann’s speech hits a hitch, and he has to be passed a fresh copy of the address from the audience.
UK CEO confidence dips
Even before these latest trade tensions, confidence among global CEOs was weakening.
A new survey of CEOs conducted by PwC found that only three in 10 chief executives were confident in their companies’ revenue growth prospects over the next year, the lowest level in five years.
The annual poll, released at the start of the World Economic Forum’s annual meeting, also found that CEOs are grappling with uncertainty over global political developments, increased cyber threats and technological change.
UK CEOs were notably more pessimistic towards the end of last year; a quarter (25%) expect the domestic economy to decline over the next 12 months - compared to 13% in 2025.
PwC’s survey took place in the run-up to November’s budget, when there was a high level of speculation about what Rachel Reeves might do.
Amid this uncertainty, Germany and India have joined the UK as the second most important destination for investment for global CEOs.
Marco Amitrano, senior partner of PwC UK, insists that the dip in CEO confidence doesn’t mean Britain is broken (as some politicians have claimed).
He says:
“Being the world’s second-most important investment destination for a second-year running should not be underestimated. It demonstrates that the UK still looks stable in a turbulent world.
But in now sharing that position it’s also a wake-up call – other countries are gaining ground and working hard to market themselves globally. As a leading nation, this now points to the need to step up our game, with government and business working together. This means action to support growth sectors, make the most of trade opportunities, and provide the consistency and clarity that underpins investor confidence.
Falling inflation will help lay the groundwork for this, which will in turn build momentum, improve productivity and create opportunity.”
Global stocks tumble while gold and silver rise
Global stock markets and the US dollar have tumbled while gold and silver prices hit record highs, as Donald Trump stepped up his rhetoric over Greenland, threatening fresh tariffs on countries opposed to the sale of the Danish territory to the US.
In Asia, Japan’s Nikkei fell by 1.1%. The main European stock markets are all down around 1.1%, with the UK’s FTSE 100 index losing 1.1%, or 111 points, to 10,083.
US stock markets (which were closed for Martin Luther King Day yesterday) are also set to sell off when Wall Street opens later. The Dow Jones is expected to drop more than 700 points, or 1.4%, while the S&P 500 is seen down more than 100 points, or 1.6%, and the Nasdaq is set to tumble 466 points, or 1.6%.
The dollar fell by 0.8% against a basket of major currencies.
The price of gold, seen as the ultimate safe haven, rose 1.3% to $4,728 an ounce. Silver touched a fresh peak of $94.77 an ounce and is now down 0.5% at $94.23 an ounce.
Meanwhile, yields on UK government bonds, known as gilts, rose, indicating higher borrowing costs. The yield, or interest rate, on the 10-year gilt, the benchmark bond, rose 5 basis points to 4.467%, the highest since 6 January.
Today, the US president threatened to impose 200% import duties on French wines and champagne, amid reports that the French president, Emmanuel Macron, does not want to join his so-called Board of Peace for Gaza.
Scott Bessent, the US Treasury secretary, then warned other countries not to retaliate against the US’s trade tariffs, speaking at a press conference in Davos today.
Trump declared in a Truth Social post on Saturday that eight European countries including the UK, France and Germany, will face tariffs “until such time as a Deal is reached for the Complete and Total purchase of Greenland”. The tariffs are due to start at 10% on 1 February, rising to 25% on 1 June.
Trump also hit out at the UK today, calling the plan by Keir Starmer’s government to hand over sovereignty of the Chagos islands, which host a joint UK-US military base, to Mauritius “an act of great stupidity”.
Updated
Georgieva: Would be good to avoid tit-for-tat trade war
The head of the International Monetary Fund has urged world leaders to avoid a new tit-for-tat trade war.
Speaking to CNBC here in Davos, Kristalina Georgieva warned that renewed trade tensions woud hurt global growth.
Georgieva says:
We had upgraded projections for this year. One of the factors for the upgrade is that the impact of tariffs was muted, there was no tit for tat trade war, and it would be very good if we keep it this way. It would be good for the world economy. It would be good for individual countries.
Incidentally, the Deutsche Bank report into the possibility that Europe might stop buying US government debt due to the Greenland crisis, cited by Scott Bessent today, was released on Sunday.
In it, Deutsche Bank analyst George Saravelos wrote:
Europe owns Greenland, it also owns a lot of Treasuries. We spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America’s largest lender: European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part. Danish pension funds were one of the first to repatriate money and reduce their dollar exposure this time last year. With USD exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing.
Finally, Bessent is asked if he sees Europe as an ally of the United States – and if so, how much economic pain the US is prepared to inflict on the EU.
Bessent returns to his ‘false narrative’ position – accusing the media of “going to the farthest point” rather than waiting for events to play out.
Bessent: 'false narrative' that Europe could dump US Treasury assets
Scott Bessent then denies that European Union countries, and the UK, could exercise the “nuclear option” over the Greenland crisis, and dump their holdings of US Treasuries.
Asked how the Treasury Department, and the White House, would prepare for this, Bessent insists it is a “completely false narrative”, and claims the media are “hysterical” over the issue.
Bessent says there is no talk in European governments about this, which he says was sparked by a recent report by Deutsche Bank which the media ‘latched onto’.
He argues that a plan to dump US Treasury holdings “defies any logic”, pointing out that Treasuries are the basis for financial transactions.
Bessent on tariffs: don't retaliate; sit back and let things play out
Scott Bessent then warns other countries not to retaliate against the US’s trade tariffs announced over the Greenland crisis.
Asked about the uncertainty that companies face, and why any country should enter a trade deal with the US, Bessent tells his press conference here in Davos:
I would say this is the same kind of hysteria that we heard on April 2nd. There was a panic.
[That was the day of Trump’s initial Liberation Day tariffs, which were reversed after a market panic].
Treasury secretary Bessent adds:
What I am urging everyone here to do is sit back, take a deep breath, and let things play out.
The Treasury Secretary reminds us that China’s escalation last year led to 145% and 125% tariffs between the two countries, before that relationship was stabilised.
What president Trump is threatening on Greenland is very different than the other trade deals. So I would urge all countries to stick with their trade deals.
Updated
Bessent: Fed chair announcement could come next week
Q: When will president Trump announce a new chairman of the Federal Reserve to succeed Jerome Powell?
Bessent says there are four “fantastic candidates”, and the decision is up to the president.
I would imagine that he will have an announcement maybe as early as next week.
Bessent then takes a pop at Europe, calling it ‘the centre of the great regulatory morass’.
He points to the recent report from Mario Draghi into European competiveness.
Bessent: Trump policies have delivered a historic economic comeback
US Treasury Secretary Scott Bessent is giving a press conference here in Davos, on economic matters.
Bessent begins by today marks one year since Donald Trump’s return to the White House, declaring tht “by all measures” the US is the strongest place for capital in the world.
Bessent gushes:
President Trump has led a 12-month transformation of the US economy….
President Trump’s policies have delivered a historic economic comeback for both Wall Street and Main Street.
Bessent cites gains in investment productivity, and resilient consumer demand.
He adds that while other countries here in Davos face “ongoing uncertainty”, market participants are seeking a jurisdiction that offers “stability, clarity and scale”.
“The smart money is on America,” Bessent claims, adding:
We invite you all to join in this 250th year and to be part of the next 250 years.
Donald Trump has suggested Britain’s decision to cede the Chagos Islands to Mauritius is among the reasons he wants to take over Greenland.
Karen Harris, managing director of Bain & Company’s Macro Trends Group, says a new post-globalisation era is beginning, amid the ‘Great Transformation’:
“As the World Economic Forum in Davos gets underway, what is more striking than ever given recent events is that 2025 will ultimately be remembered as the year in which neoliberal globalisation ended and the post-globalisation era began. The world seems to be in the early stages of a new multidecadal era we refer to as the Great Transformation, with 2025 likely to ultimately be recalled as the inflection point for its acceleration.
“In the medium and longer term, we expect these changes will be growth drivers. But this time of change is occurring just as one of the most highly exaggerated business cycles in modern history (the post-pandemic cycle) is coming to its end.
“At present, the major global economies are caught in the conflict between reasons to accelerate and reasons to stop, much like a driver with one foot on the gas and another on the brake. The open question for us in 2026 is whether this year will bring a resolution to this clash between the long-term drivers of growth and acceleration and the short-term (business cycle) drivers of recession.”
Reeves plans to refund some visa fees in effort to attract ‘trailblazer’ investment to UK
Rachel Reeves will pledge to refund visa fees for some global businesses on Tuesday, as she flies to the World Economic Forum in Davos aiming to showcase the UK as a haven of stability, despite Donald Trump’s latest tariff threats.
The chancellor, who will be accompanied by the business secretary, Peter Kyle, will hold a series of meetings with business leaders at the annual gathering of the global elite in the Swiss mountain resort.
She will announce tweaks to the visa regime aimed at encouraging “trailblazer” businesses to bring highly skilled staff to the UK – including refunding fees – and speeding up the time it takes to qualify as a sponsor of migrant workers.
“Some countries give you a platform, but Britain gives you momentum. My message at Davos this week is clear: choose Britain – it’s the best place in the world to invest,” the chancellor said in pre-released remarks.
Trump: we'll discuss Greenland in Davos
Yesterday, president Donald Trump said the United States would talk about acquiring Greenland at this week’s World Economic Forum in Davos.
He claimed Denmark cannot protect the country, telling reporters in Florida:
“We have to have it. They have to have this done. They can’t protect it, Denmark, they’re wonderful people.
I know the leaders, they’re very good people, but they don’t even go there.”
Trump also said in a social media post that he had a “good telephone call” with NATO Secretary General Mark Rutte, and that he had agreed to a meeting of “various parties” on Greenland in Davos.
Introduction: Von der Leyen, He, Macron, Carney and Bessent all to speak
Good morning from Davos, where the World Economic Forum is getting underway under the shadow of Donald Trump’s designs on Greenland.
Nearly 3,000 leaders, including more than heads of state and government, are convening in Davos under the theme A Spirit of Dialogue – an optimistic position, given the pressures facing the old world order.
The sight of one NATO member coveting another’s territory, and threatening trade levies if it can’t have it, is anathma to WEF’s identity as a champion of the rules-based, multilateral system.
So, that Spirit of Dialogue will be tested, as European leaders question how to handle a US president who likes to communicate through the big stick of tariff threats.
As we reported yesterday, Europe is now considering retaliation:
It promises to be one of the most consequential, tense and dramatic WEF meetings in years. The US have sent their biggest ever delegation to Davos, including Treasury Secretary Scott Bessent – who told reporters here yesterday it would be “very unwise“ for European governments to retaliate.
As Bessent put it:
“I think it’s a complete canard that the president will be doing this because of the Nobel prize. The president is looking at Greenland as a strategic asset for the United States.”
Greenland isn’t the only crisis overshadowing Davos; Iran, Ukraine, AI bubble fears, and Trump’s choice of the next head of the US Federal Reserve are also on delegates’ minds.
There’s also a lot going on outside the WEF congress centre itself, as many businesses and governments have taken over Davos shops and turned them into their own bases for the week.
So as well as the talking and speechifying, there’ll be business deals being carved up here in the snow.
Trump is due to address Davos on Wednesday in a special address; today we’ll hear from Ursula von der Leyen, president of the European Union, French president Emmanuel Macron, China’s vice-premier He Lifeng, and Canada’s prime minister Mark Carney, with UK chancellor Rachel Reeves also appearing on a panel.
The agenda
9.30am Davos / 8.30am GMT: Conversation with Satya Nadella, CEO of Microsoft
10.50am Davos / 9.50am GMT: Speech: Ursula Von der Leyen, president of the European Union
11.20am Davos / 10.20am GMT: He Lifeng, Vice-Premier of the People’s Republic of China
2pm Davos / 1pm GMT: Speech: French president Emmanuel Macron
2.30pm Davos / 1.30pm GMT: Conversation with Treasury Secretary Scott Bessent
3.30pm Davos/ 2.30pm GMT: Conversation with Sheikh Mohammed bin Abdulrahman Al Thani, Prime Minister of Qatar
4.15pm Davos / 3.15pm GMT: Panel discussion on “Prosperity: Sovereign Yet Connected?” including chancellor Rachel Reeves
