Trump’s Davos Speech Reignites Greenland Push Amid European Tensions

President Donald Trump used a high-profile speech at the World Economic Forum in Davos, Switzerland, on Wednesday to forcefully reiterate his desire for the United States to acquire Greenland, while simultaneously assailing European allies and casting the global order as heavily dependent on American strength. The remarks, delivered to an audience of world leaders, billionaires, and policy shapers, reignited transatlantic tensions, triggered market volatility, and underscored a persistent strain in international diplomacy under his administration.

Greenland Acquisition: A Repeated Demand with Economic Threats

Addressing the forum, President Trump declared that while the United States ‘won’t use force’ to take Greenland from Denmark, control of the vast Arctic territory was essential for both national and international security. He called for ‘immediate negotiations’ for the transfer of ownership, arguing that only the U.S. possessed the capability to adequately defend the island from external threats, and that such defense was only logical if the territory was under American sovereignty, rather than leased.

Despite explicitly ruling out military intervention, a statement he described as ‘probably the biggest statement, because people thought I would use force,’ Mr. Trump quickly pivoted to implicit and explicit economic threats. He reminded European leaders of his past unilateral imposition of tariffs on imports, warning that he had already threatened to increase tariffs on Denmark and other European countries that have defended Danish ownership of Greenland. ‘They have a choice,’ Mr. Trump stated bluntly. ‘You can say yes, and we will be very appreciative, or you can say no. We will remember.’ This tactic, alternating between coercion and humiliation, has become a hallmark of his approach to global power dynamics, seeking to expand America’s physical footprint and influence.

Notably, throughout his remarks, President Trump appeared to confuse Greenland with Iceland on multiple occasions. He claimed that ‘until the last few days when I told them about Iceland, they loved me’ and stated, ‘They’re not there for us on Iceland, that I can tell you. Our stock market took the first dip yesterday because of Iceland. So Iceland’s already cost us a lot of money.’ This recurring mix-up, previously observed in White House briefings, highlights a potential lack of clarity regarding the specific Nordic nations at the center of the diplomatic dispute, even as market dips were actually attributed to tensions over Greenland, as reported by The New York Times.

Strained Transatlantic Relations and European Reactions

Beyond the Greenland issue, President Trump delivered a sweeping critique of Europe, portraying its nations as largely dependent on the United States for their peace and prosperity. ‘Without us, most of the countries don’t even work,’ he asserted, lamenting that the U.S. had been ‘mistreated by its allies’ and could not rely on them for mutual defense. His hour-long speech also derided European countries for their immigration policies and their adoption of renewable energy sources like wind and solar power, claiming that their economies and security would falter without American support.

European leaders present in Davos offered varied reactions. Rasmus Jarlov, chairman of Denmark’s Parliament defense committee, expressed a measured response, telling reporters he ‘wasn’t too upset’ and was ‘glad he’s ruling out military force.’ Jarlov emphasized that while Trump’s insistence on acquiring Greenland was not new, Denmark’s position remained firm: ‘Of course, we still insist that we are not handing over Greenland.’

Meanwhile, NATO Secretary-General Mark Rutte cautioned against allowing the Greenland debate to overshadow more pressing security concerns. Speaking on a panel, Rutte acknowledged the need to resolve the Greenland issue ‘in an amicable way’ but stressed, ‘the main issue is not Greenland. Now, the main issue is Ukraine.’ He urged European countries to bolster their military industries to meet Ukraine’s needs and NATO’s targets, highlighting that Ukraine was running out of interceptors to defend against Russian missiles. Polish President Karol Nawrocki echoed Rutte’s sentiments, affirming that the war in Ukraine remained ‘the main problem in Europe nowadays.’

The European Parliament, in a related development, voted to delay a significant trade deal between the European Union and the South American Mercosur bloc. This setback, coming amidst Trump’s threats of new escalating tariffs on European goods, was seen by the European Commission as undermining the bloc’s reputation as a ‘reliable and predictable trade partner’ and hindering efforts to diversify trade relationships during a critical time for EU producers and exporters.

Global Economic Repercussions and Market Volatility

President Trump’s rhetoric and the escalating tensions over Greenland had immediate repercussions in global financial markets. After a brief sell-off on Tuesday, which saw U.S. stocks fall to their lowest in months, markets stabilized somewhat on Wednesday, with the S&P 500 rising roughly 1 percent. However, underlying anxieties persisted.

Energy stocks led the recovery, partly due to positive earnings and rising energy costs from a winter cold snap, but analysts also pointed to lingering worries that geopolitical upheaval in Greenland, Venezuela, and Ukraine could further drive up global commodity prices. The price of gold, traditionally a safe-haven asset, rose sharply for the third consecutive day, climbing approximately 1.5 percent. Gold prices have soared by 75 percent over the past year, reaching unprecedented levels as central banks and some investors increasingly diversify investments away from the United States, according to The New York Times.

Conversely, the U.S. dollar weakened for a second day against a basket of major trading partners’ currencies, signaling continued angst over U.S. political uncertainty. While the dollar strengthened against the Swiss Franc, Euro, and Danish Krone, it lost ground against the Australian Dollar, Norwegian Krone, and Swedish Krone. This market instability marked a return to the trade policy-driven volatility that has characterized much of the second Trump administration, challenging earlier consensus expectations that political volatility and tariff headlines would diminish in 2026.

Seema Shah, chief global strategist at Principal Asset Management, observed that ‘The consensus entering 2026 was that political volatility would diminish, tariff headlines would fade and affordability concerns would restrain new trade measures. The latest announcements surrounding Greenland challenge all three assumptions.’ Takahide Kiuchi, executive economist at Japan’s Nomura Research Institute, suggested that to restore stability, ‘the Trump administration may be forced to reassess its tariff policies toward Europe,’ as markets have shown a clear trend of capital flight from the U.S. market.

The President’s Davos address underscored a continuation of his distinctive foreign policy approach, characterized by assertive unilateralism and a willingness to leverage economic pressure against traditional allies to achieve strategic objectives, thereby maintaining a state of elevated geopolitical and market uncertainty.