Washington, Jan. 20, 2026 – President Trump set the stage for a crucial few days ahead — when the durability of the US alliance with Europe is set to be put to the test — with a series of comments and social media posts overnight doubling down on his threats against multiple European nations.
“It’s going to be a very interesting Davos,” Trump joked to reporters at nearly midnight on Monday as he traveled back to Washington ahead of his trip to the World Economic Forum’s Annual Meeting, where, Trump added, “I have a lot of messages” to deliver.
Trump again said the US would take control of Greenland one way or another and floated a 200%tariff on French wines if President Emmanuel Macron doesn’t join a new initiative the president is leading around Gaza.
The president’s speech in Davos is set for Wednesday, just one moment in the days ahead when observers will be watching whether, as Capital Economics put it in an analysis, “cooler heads will prevail before things get out of hand in either markets or geopolitics.”
Trump is expected to meet one-on-one with foreign leaders and CEOs, and in addition to various other speeches and meetings set for Davos, European Union leaders are set to convene Thursday in Brussels for a second meeting to map out their response to Trump’s Greenland threat.
That European Council meeting will address “recent developments in transatlantic relations” after an emergency gathering this past weekend.
Trump previously threatened to impose a 10% tariff on goods from eight European countries beginning Feb. 1 over the Greenland issue, with Europe reported weighing $108 billion in retaliatory tariffs in response.
European Commission President Ursula von der Leyen called Trump’s move “a mistake” in her own speech in Davos on Tuesday, adding “when friends shake hands, it must mean something.”
But the president told reporters of European opposition to his Greenland plans: “I don’t think they’re going to push back too much.”
“This is one of those be-ready-for-anything weeks … most of them POTUS-related,” noted Edward Yardeni, president of Yardeni Research. He wrote that many other factors could move markets in the days ahead, including developments with the Federal Reserve and a possible Supreme Court decision on the legality of Trump’s tariffs.
‘There can be no going back’
For now, Trump appears intent on escalating the tension. In posts on Truth Social overnight Tuesday, he revealed new previously private texts from Markt Rutte, the Secretary General of NATO, and Macron and wrote a post declaring “there can be no going back” on his threat to have the US take over Greenland.
He also accused the United Kingdom of “total weakness” because of its plans to hand over the Chagos Islands to Mauritius.
The larger context for markets, as Capital Economics added in its analysis, is how, so far in this blowup, market participants have become increasingly desensitized to Trump’s threats.
“Whether that buffer proves sufficient to allow financial markets to weather this latest storm depends on how far the political situation between the US and Europe deteriorates,” the note said.
The group’s economists also foresee key economic costs if a new round of tariffs goes forward, estimating that new duties could trigger a recession in the United Kingdom and cost the eurozone between 0.2% and 0.5% of GDP.
Perhaps the only certainty, as trade lawyer Ted Murphy wrote to clients, is that suggestions that the tariff uncertainty of 2025 may be ebbing “may not turn out to be the case [as] the uncertainty created by U.S. tariff policy is almost certain to continue throughout 2026.”
“Consensus has been that the average tariff rate was biased downward as President Trump has been focused on affordability, and that the major trade-related uncertainty of 2025 is behind us,” added Ed Mills, a Washington policy analyst and managing director at Raymond James, noting that this consensus is being severely tested.
“We think [Trump] is entirely willing to impose the tariffs” over Greenland, although other various outcomes remain possible. (Yahoo Finance)
