World leaders and corporate executives left the Swiss resort town after a World Economic Forum annual meeting shaped less by consensus-building than by confrontation. The return of Donald Trump to the White House dominated discussions, reframing debates on geopolitics, trade, energy, and defence, while injecting uncertainty into nearly every major policy conversation.
Europe Reassesses Its Relationship With Washington
European leaders arrived in Davos already uneasy about the direction of the transatlantic alliance. That unease hardened after Trump’s public assertion that the United States should acquire Greenland, a move widely seen in Europe as a direct challenge to territorial sovereignty. European resistance—backed by market volatility that followed the remarks—was credited by some officials as a factor in Washington subsequently softening its stance.
Even so, the episode left lasting damage. European policymakers openly acknowledged that trust in Washington had been shaken, prompting renewed discussions about accelerating European decision-making during crises. Senior officials conceded that institutional delays had left the bloc vulnerable to external pressure, particularly from an unpredictable U.S. administration.
Many European executives described the tone of the Trump administration as abrasive, though some privately admitted that Washington was raising long-standing concerns Europe had been slow to address. The result was not alignment, but recalibration: Europe is preparing for a future in which U.S. policy support cannot be assumed.
Ukraine briefly faded from the agenda before returning sharply to focus when Volodymyr Zelenskiy arrived in Davos amid renewed diplomatic activity. Despite claims of progress from U.S., Ukrainian, and Russian officials, Zelenskiy said territorial issues remained unresolved, underscoring how distant a peace settlement still appears.
In another sign of shifting diplomatic norms, Vladimir Putin sent envoy Kirill Dmitriev to Davos for talks with U.S. officials—the first Russian presence linked to the Forum since the 2022 invasion of Ukraine. The meetings, held outside official WEF sessions, highlighted how informal channels are increasingly shaping global diplomacy.
Markets Confront a World With Less Predictability
Trade tensions resurfaced after Washington threatened tariffs against European allies resisting U.S. ambitions over Greenland. For many CEOs, the episode reinforced a broader concern: that Europe can no longer rely on the United States as a predictable economic partner.
Canadian Finance Minister François-Philippe Champagne captured the mood by noting that stability, predictability, and respect for the rule of law—long seen as cornerstones of Western economic cooperation—were now in short supply. His remarks echoed private conversations across Davos boardrooms.
Trump’s posture strengthened arguments for diversifying trade away from the United States, both for governments and multinational firms. Executives spoke increasingly about regionalisation, supply-chain redundancy, and intra-bloc trade as defensive strategies rather than efficiency plays.
Financial firms entered 2026 cautiously optimistic but alert to disruption from geopolitics, artificial intelligence, and regulatory shifts. Jamie Dimon warned that proposals to cap credit card interest rates could destabilise the U.S. economy, while bankers said they were intensifying efforts to influence affordability policies from within the administration.
Cryptocurrency executives promoted stablecoins and blockchain infrastructure as next-stage financial disruptors. While some banks reported limited experimentation, others remained sceptical, citing regulatory ambiguity and systemic risk.
Overlaying all of this were investor concerns about the independence of the U.S. Federal Reserve and the possibility of asset bubbles—particularly in AI-linked equities—adding to an already fragile macroeconomic outlook.
Artificial Intelligence Moves From Hype to Deployment Anxiety
The technology sector arrived in force, signalling confidence after months of valuation anxiety. Rare appearances by Elon Musk and Jensen Huang drew packed rooms, while AI firms positioned themselves aggressively for enterprise adoption.
Start-ups such as Anthropic leased prominent office space along Davos’ main street, reflecting renewed belief that corporate demand would sustain growth. Unlike late 2025, executives largely dismissed fears that AI stocks were fundamentally overvalued.
Business leaders acknowledged job losses were inevitable but argued AI would serve more as a justification for layoffs than their root cause. They insisted new roles would emerge, though often requiring skills workers do not yet possess.
Union leaders pushed back strongly, warning that AI adoption could accelerate inequality and erode labour protections. Calls for regulation, retraining programmes, and stronger social safety nets became more prominent, revealing a widening gap between corporate optimism and labour anxiety.
Energy Policy Tilts Back Toward Oil
Energy executives returned to Davos emboldened by a U.S. administration openly hostile to renewable mandates. After Trump ordered a pause on wind projects and urged companies to expand oil drilling, fossil-fuel firms sensed a decisive shift in narrative.
U.S. Energy Secretary Chris Wright challenged prevailing forecasts by arguing that global oil production must more than double to meet future demand, dismissing expectations that consumption would peak within two decades. He also criticised Europe and California for what he described as excessive spending on green energy.
The oil industry welcomed the reframing, viewing it as political validation after years of regulatory pressure. Yet the energy debate fractured when Musk broke ranks, arguing that solar power alone could meet U.S. electricity demand if deployment barriers were lowered.
Musk pointed to high tariffs on solar components as artificially inflating costs, saying that policy, rather than technology, was the primary obstacle to large-scale adoption—particularly as data-centre energy demand surges alongside AI growth.
Defence Spending Gains Momentum Amid Uncertainty
Trump’s declaration that there was no military solution to his Greenland demands briefly reassured markets. Still, defence executives left Davos anticipating increased spending on both sides of the Atlantic, particularly in infrastructure, logistics, and workforce expansion.
Trump also reignited controversy by claiming the existence of a secret sonic weapon allegedly used during the capture of Venezuela’s Nicolas Maduro. While the statement drew scepticism, it underscored how unconventional rhetoric has become a strategic tool in itself.
Russia and China were urged by Trump to “go back to the drawing board,” a remark that prompted the Kremlin to confirm its security services were examining the claim. The episode encapsulated the Davos mood: a world grappling not only with shifting power balances, but with the growing influence of unpredictability as a governing force.
(Source:www.reuters.com)
Europe Reassesses Its Relationship With Washington
European leaders arrived in Davos already uneasy about the direction of the transatlantic alliance. That unease hardened after Trump’s public assertion that the United States should acquire Greenland, a move widely seen in Europe as a direct challenge to territorial sovereignty. European resistance—backed by market volatility that followed the remarks—was credited by some officials as a factor in Washington subsequently softening its stance.
Even so, the episode left lasting damage. European policymakers openly acknowledged that trust in Washington had been shaken, prompting renewed discussions about accelerating European decision-making during crises. Senior officials conceded that institutional delays had left the bloc vulnerable to external pressure, particularly from an unpredictable U.S. administration.
Many European executives described the tone of the Trump administration as abrasive, though some privately admitted that Washington was raising long-standing concerns Europe had been slow to address. The result was not alignment, but recalibration: Europe is preparing for a future in which U.S. policy support cannot be assumed.
Ukraine briefly faded from the agenda before returning sharply to focus when Volodymyr Zelenskiy arrived in Davos amid renewed diplomatic activity. Despite claims of progress from U.S., Ukrainian, and Russian officials, Zelenskiy said territorial issues remained unresolved, underscoring how distant a peace settlement still appears.
In another sign of shifting diplomatic norms, Vladimir Putin sent envoy Kirill Dmitriev to Davos for talks with U.S. officials—the first Russian presence linked to the Forum since the 2022 invasion of Ukraine. The meetings, held outside official WEF sessions, highlighted how informal channels are increasingly shaping global diplomacy.
Markets Confront a World With Less Predictability
Trade tensions resurfaced after Washington threatened tariffs against European allies resisting U.S. ambitions over Greenland. For many CEOs, the episode reinforced a broader concern: that Europe can no longer rely on the United States as a predictable economic partner.
Canadian Finance Minister François-Philippe Champagne captured the mood by noting that stability, predictability, and respect for the rule of law—long seen as cornerstones of Western economic cooperation—were now in short supply. His remarks echoed private conversations across Davos boardrooms.
Trump’s posture strengthened arguments for diversifying trade away from the United States, both for governments and multinational firms. Executives spoke increasingly about regionalisation, supply-chain redundancy, and intra-bloc trade as defensive strategies rather than efficiency plays.
Financial firms entered 2026 cautiously optimistic but alert to disruption from geopolitics, artificial intelligence, and regulatory shifts. Jamie Dimon warned that proposals to cap credit card interest rates could destabilise the U.S. economy, while bankers said they were intensifying efforts to influence affordability policies from within the administration.
Cryptocurrency executives promoted stablecoins and blockchain infrastructure as next-stage financial disruptors. While some banks reported limited experimentation, others remained sceptical, citing regulatory ambiguity and systemic risk.
Overlaying all of this were investor concerns about the independence of the U.S. Federal Reserve and the possibility of asset bubbles—particularly in AI-linked equities—adding to an already fragile macroeconomic outlook.
Artificial Intelligence Moves From Hype to Deployment Anxiety
The technology sector arrived in force, signalling confidence after months of valuation anxiety. Rare appearances by Elon Musk and Jensen Huang drew packed rooms, while AI firms positioned themselves aggressively for enterprise adoption.
Start-ups such as Anthropic leased prominent office space along Davos’ main street, reflecting renewed belief that corporate demand would sustain growth. Unlike late 2025, executives largely dismissed fears that AI stocks were fundamentally overvalued.
Business leaders acknowledged job losses were inevitable but argued AI would serve more as a justification for layoffs than their root cause. They insisted new roles would emerge, though often requiring skills workers do not yet possess.
Union leaders pushed back strongly, warning that AI adoption could accelerate inequality and erode labour protections. Calls for regulation, retraining programmes, and stronger social safety nets became more prominent, revealing a widening gap between corporate optimism and labour anxiety.
Energy Policy Tilts Back Toward Oil
Energy executives returned to Davos emboldened by a U.S. administration openly hostile to renewable mandates. After Trump ordered a pause on wind projects and urged companies to expand oil drilling, fossil-fuel firms sensed a decisive shift in narrative.
U.S. Energy Secretary Chris Wright challenged prevailing forecasts by arguing that global oil production must more than double to meet future demand, dismissing expectations that consumption would peak within two decades. He also criticised Europe and California for what he described as excessive spending on green energy.
The oil industry welcomed the reframing, viewing it as political validation after years of regulatory pressure. Yet the energy debate fractured when Musk broke ranks, arguing that solar power alone could meet U.S. electricity demand if deployment barriers were lowered.
Musk pointed to high tariffs on solar components as artificially inflating costs, saying that policy, rather than technology, was the primary obstacle to large-scale adoption—particularly as data-centre energy demand surges alongside AI growth.
Defence Spending Gains Momentum Amid Uncertainty
Trump’s declaration that there was no military solution to his Greenland demands briefly reassured markets. Still, defence executives left Davos anticipating increased spending on both sides of the Atlantic, particularly in infrastructure, logistics, and workforce expansion.
Trump also reignited controversy by claiming the existence of a secret sonic weapon allegedly used during the capture of Venezuela’s Nicolas Maduro. While the statement drew scepticism, it underscored how unconventional rhetoric has become a strategic tool in itself.
Russia and China were urged by Trump to “go back to the drawing board,” a remark that prompted the Kremlin to confirm its security services were examining the claim. The episode encapsulated the Davos mood: a world grappling not only with shifting power balances, but with the growing influence of unpredictability as a governing force.
(Source:www.reuters.com)