The World Economic Forum’s annual meeting opens Monday in Davos, Switzerland, but this year’s gathering of billionaires, heads of state, and policy elites arrives at a moment of genuine crisis rather than the usual performative concern about inequality and climate change. President Trump’s threats to impose tariffs on European nations unless they support American control of Greenland have transformed what’s typically a networking event with ski chalets into a potential showdown over the future of transatlantic relations.
European Commission President Ursula von der Leyen, French President Emmanuel Macron, and Canadian Prime Minister Mark Carney will all attend, with each expected to address what officials privately describe as the most significant challenge to NATO since its founding. Trump’s suggestion that military force remains on the table for Greenland acquisition has put something previously inconceivable on the agenda: whether the Western alliance can survive fundamental disagreements between its members about territorial sovereignty.
The atmosphere heading into Monday’s opening could not be more different from the typical Davos experience of champagne receptions and panels about stakeholder capitalism. European leaders are arriving with prepared responses to potential tariff announcements. Security details have expanded dramatically. The usual assumption that everyone in the room shares basic premises about international order has evaporated entirely.
The Greenland Crisis
Trump’s renewed push to acquire Greenland, which escalated dramatically in early January, has evolved from social media provocation to genuine diplomatic crisis. The president suggested that tariffs on seven EU countries plus the United Kingdom would follow unless those nations endorsed American efforts to take control of the Danish territory. Denmark’s Prime Minister Mette Frederiksen responded that Greenland belongs to Greenlanders and is not for sale, a position supported unanimously by NATO allies.
The conflict exposes deeper tensions about American commitment to the alliance it built. For decades, the mutual defense guarantee embedded in NATO’s Article 5 relied on shared understanding that member states would not threaten each other’s territorial integrity. Trump’s Greenland demands challenge that foundation explicitly, treating a treaty ally’s sovereign territory as a potential acquisition target backed by economic and military pressure.
European officials arriving in Davos face impossible choices. Publicly capitulating to Trump’s demands would undermine both their own sovereignty and the international rules-based order they’ve championed. Openly defying the president risks tariffs that would devastate their economies and potentially fracture NATO at a moment when Russian aggression makes collective defense more important than ever. Most are seeking middle ground that probably doesn’t exist.
The Greenland situation also intersects with broader anxieties about American reliability. If the United States can threaten economic warfare against allies over territorial disputes, what stops future presidents from making similar demands? European leaders are quietly discussing what independent defense capabilities might look like if American protection can no longer be assumed. These conversations were unthinkable five years ago.
The Tariff Threat
Beyond Greenland, Trump’s broader tariff posture creates genuine uncertainty for global business leaders gathering in Davos. The president has repeatedly suggested sweeping tariffs on Chinese goods, potential automotive tariffs affecting European manufacturers, and punitive measures against countries whose trade policies he considers unfair. The specifics change frequently, making planning nearly impossible for multinational companies.
Markets have already reacted to this uncertainty. The S&P 500 erased its gains for 2026 on Tuesday after tariff threats intensified, with more than $1.2 trillion in value wiped out in a single session. While stocks partially recovered after Trump called off immediate European tariffs, the episode demonstrated how quickly rhetoric can translate into real economic consequences.
Ken Griffin, founder and CEO of hedge fund Citadel, captured the business community’s mood in a recent interview: “Investors around the world do not want to see an escalation of the stress of global trade.” That sentiment will pervade Davos conversations, as executives try to understand whether current uncertainty represents negotiating tactics or genuine policy direction.
For European manufacturers specifically, automotive tariffs would be devastating. German automakers export billions worth of vehicles to America annually. Italian and French luxury brands depend heavily on American consumers. The threat of punitive tariffs creates pressure to relocate production to the United States, exactly the outcome Trump has publicly sought but through coercion rather than incentives.
The Board of Peace
Adding another layer of complexity, Trump plans to host a signing ceremony at Davos for his “Board of Peace” initiative. The president has pitched this new international body as a mechanism to oversee reconstruction in Gaza and potentially serve as an alternative forum for resolving global conflicts. Several nations have agreed to join, while many others have declined or remained uncommitted.
Critics view the Board of Peace as a potential rival to the United Nations, undermining the international system that has structured global diplomacy since World War II. China’s foreign ministry pointedly noted that Beijing “always practices true multilateralism” and remains “firmly committed to safeguarding the international system with the UN at its core.” The statement stopped short of directly criticizing Trump but made clear that China sees the initiative as an attempt to circumvent established frameworks.
The nations considering Board of Peace membership face calculations that extend beyond the immediate initiative. Joining signals alignment with American leadership and potentially access to reconstruction contracts and development assistance. Declining risks exclusion from future arrangements and possible American displeasure. For smaller nations that depend on American security guarantees or economic relationships, the pressure to participate is significant.
Whether the Board of Peace develops into something meaningful or fades into irrelevance like many previous diplomatic initiatives remains unclear. What’s certain is that its introduction at Davos, surrounded by tariff threats and NATO tensions, contributes to an atmosphere of institutional instability that has executives and policymakers genuinely concerned about global order.
What Davos Will Reveal
The next few days will provide clarity on several critical questions. How willing are European leaders to openly challenge Trump’s demands? Will any nations announce Board of Peace participation that shifts momentum toward the initiative? Can private conversations between officials reduce tensions that public statements have inflamed?
NATO Secretary General Mark Rutte will attend alongside the heads of state most directly affected by current tensions. His role as mediator between American demands and European resistance could prove crucial. The alliance has survived internal disagreements before, but rarely over fundamental questions about whether members can threaten each other’s territory.
Business leaders will watch for any indication of tariff specifics or timelines. Currently, companies cannot plan effectively because the threats remain vague and subject to sudden reversal based on presidential mood. Executives need predictability to make investment decisions, and Davos conversations might reveal whether predictability is even possible in the current environment.
The Bottom Line
Davos 2026 arrives at a genuinely uncertain moment for the international order that such gatherings typically celebrate and reinforce. Trump’s Greenland demands have put NATO’s foundations in question. Tariff threats have markets whipsawing on presidential statements. The Board of Peace initiative suggests American interest in building alternative institutions outside traditional multilateral frameworks.
For the billionaires and officials gathering in the Swiss Alps, this year’s meeting involves stakes beyond the usual networking and deal-making. The conversations in hotel lobbies and on ski lifts might actually matter for how nations and businesses navigate a world where the assumptions underlying postwar international order can no longer be assumed.
Whether cooler heads prevail remains genuinely uncertain. Trump has shown he’s willing to use economic pressure against allies in ways his predecessors avoided. European leaders have shown they’re unwilling to simply capitulate to demands they consider illegitimate. The collision between American power and European principles will play out in real time over the next several days, with consequences that extend far beyond the snowy Swiss resort where it unfolds.
