Davos Drama: Markets Watch as Trump Turns Up the Heat on Europe
Global markets are on edge — but not everyone is worried.
At the World Economic Forum in Davos, US Treasury Secretary Scott Bessent dismissed concerns over Denmark’s sale of US Treasurys, even as President Donald Trump’s revived tariff threats and controversial pursuit of Greenland sent shockwaves through diplomatic and trading circles.
“They’ve been selling Treasurys for years,” Bessent said bluntly. “I’m not concerned at all.”
That calm stance stood in stark contrast to the escalating geopolitical tension unfolding just outside the conference halls.
Greenland at the Center of a Global Standoff
Trump arrived in Switzerland doubling down on his most provocative foreign policy push yet: acquiring Greenland, a territory governed by Denmark — and a NATO ally.
“Greenland is imperative for National and World Security,” Trump posted Tuesday. “There can be no going back.”
The president is scheduled to meet with European leaders furious over what they view as economic coercion tied to sovereignty. Despite the backlash, Trump struck a confident tone, telling reporters that “things are going to work out pretty well,” while teasing just how far he’s willing to go to get the deal done.
Tariff Threats Escalate — Fast
Over the weekend, Trump announced sweeping trade penalties aimed at Europe:
10% tariffs on eight European countries starting February 1
25% tariffs beginning June 1 if no agreement on Greenland is reached
Tariffs would apply to “any and all goods” sent to the US
The pressure didn’t stop there.
Trump also threatened 200% tariffs on French wine and champagne after French President Emmanuel Macron rejected Trump’s call to join his peace initiative.
The result? A sharp deterioration in transatlantic trade relations — just months after new agreements were forged.
Europe Pushes Back
EU capitals aren’t standing still.
European officials are reportedly discussing retaliatory tariffs of up to $108 billion on American goods. The move would mark one of the most aggressive trade responses in recent history.
Still, Trump remains defiant. He insists that Europe will not reconsider its trade agreements or pledged investments in the United States because of the Greenland dispute.
Bonds, Courts, and Unfinished Business
While politics dominate headlines, financial stability remains a critical subplot.
Denmark’s sale of US Treasurys has drawn attention, but US officials appear unconcerned. Behind the scenes, however, the US Supreme Court looms large.
The court has already passed on three opportunities this year to rule on the legality and scope of Trump’s global tariffs — leaving markets and policymakers in limbo. It’s unclear when a decision may come.
Trump has repeatedly warned that losing tariff authority would be a “terrible blow” to the US, underscoring how central trade weapons are to his strategy.
The Bigger Picture
From Davos boardrooms to Brussels war rooms, one reality is becoming clear:
Trade, geopolitics, and market stability are colliding — fast.
While US officials project confidence and downplay bond market signals, Trump’s aggressive use of tariffs and his Greenland push are redefining alliances, unsettling investors, and testing the limits of global trade rules.
Whether this strategy leads to leverage — or backlash — may soon depend not just on negotiations abroad, but on decisions still pending at home.