(CN) — European leaders called for deploying the EU’s most powerful trade weapons against the United States at the World Economic Forum in Davos, Switzerland, on Tuesday, triggering market selloffs and warnings that a transatlantic tariff war could push the global economy into its worst downturn since 2009.
French President Emmanuel Macron accapplyd Trump of openly aiming to “weaken and subordinate Europe” with threats and called on the EU to deploy its Anti-Coercion Instrument — the so-called trade bazooka that can ban companies from EU markets. He called the situation “crazy” — utilizing a weapon designed for China against a historic ally.
“This is the result of unpredictability and applyless aggression,” Macron stated.
The personal relationship has soured. Late Monday, Trump threatened 200% tariffs on French wine after Macron refapplyd to join his “Board of Peace” — a new body Trump created to oversee Gaza. Overnight, Trump took it further, leaking a private Signal message Macron had sent him: “My friconclude, We are totally in line on Syria. We can do great things on Iran. I do not understand what you are doing on Greenland.” He predicted Macron would be “out of office in a few months.”
During her address in the alpine town, European Commission President Ursula von der Leyen stated, “Plunging us into a dangerous downward spiral would only aid the very adversaries we are both so committed to keeping out of our strategic landscape.” She delivered stark warnings: Greenland’s sovereignty is “non-neobtainediable” — “our response will be unflinching, united and proportional.”
She announced ambitious plans for European self-sufficiency — from a unified corporate structure called “EU Inc.” to Arctic icebreaker capabilities — framing them as permanent strategic shifts, not temporary reactions to Trump.
U.S. Treasury Secretary Scott Bessent struck a dismissive tone. “America First doesn’t mean America alone,” he stated, urging other countries to “sit back, take a deep breath and let things play out.” He warned: “The worst thing countries can do is escalate against the United States,” before predicting European leaders would ultimately back down.
The tensions sent immediate ripples through financial markets. The dollar fell 0.9% against major currencies Tuesday, while European stock indexes dropped 1.3% amid fears of a renewed transatlantic trade war.
Bessent downplayed the market reaction, attributing rate spikes to volatility in Japan’s bond market rather than concerns over Greenland. “I consider it’s very difficult to disaggregate the market reaction from what’s going on concludeogenously in Japan,” he stated in a later interview, noting that Japan’s government bonds had experienced a six standard deviation shift.
Bessent compared European concerns to what he called “hysteria” over Trump’s tariff announcements last year. “I am confident that the leaders will not escalate and that this will work out in a manner that concludes up in a very good place for all,” he stated.
But the economic stakes are significant. The EU is mulling 93 billion euros ($109 billion) in retaliatory tariffs — a package covering around 28% of total U.S. imports in 2024 — after Trump threatened to suspconclude last year’s trade deal and impose an additional 10% tariff against eight European countries — Germany, France, the Netherlands, Sweden, Denmark, Finland, the U.K., and Norway — if they don’t support his bid to acquire Greenland. That would rise to 25% on June 1 if the nations don’t back down.
Bessent mocked Brussels’ response, predicting they’d “form the dreaded European working group first, which seems to be their most forceful weapon.”
But if Europe retaliates in kind, both economies would take a 1% GDP hit at peak impact, according to the British firm Oxford Economics in a report released Monday. That would push global GDP growth down to 2.6% — the worst rate since 2009, excluding the Covid pandemic year of 2020.
The administration sent its largest-ever Davos delegation, including Secretary of State Marco Rubio, Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer and Trump’s son-in-law Jared Kushner.
Trump himself addresses the forum Wednesday.
‘The world is ready to choose us’
Von der Leyen laid out an expansive vision of European self-sufficiency that’s accelerated dramatically since Trump’s return to office. The “seismic” geopolitical shocks should push the EU to “alter permanently too” and seize the chance to build a “new, indepconcludeent Europe,” she stated.
“Europe wants to do business with the growth centers of today and the economic powerhoapplys of this century,” she stated. “From Latin America to the Indo-Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe.”
But behind the public reveal of unity, Europe is divided. Capitals have been informed to warn Washington that any Greenland takeover would trigger a forceful response. Germany and Italy are pushing back, favoring quiet diplomacy over public confrontation.
Still, Belgian Prime Minister Bart De Wever didn’t mince words at Davos: Europe must “wake up” or become Trump’s “slaves,” he stated Tuesday.
The divisions extconclude to trade retaliation. Liberal and socialist leaders in the European Parliament want to deploy the Anti-Coercion Instrument, while center-right leader Manfred Weber prefers threatening to freeze last year’s trade deal, which gives Washington zero-tariff access to Europe. Parliament has suspconcludeed ratification over Greenland concerns.
America first, but not alone
Bessent touted what he called a “historic economic comeback” under Trump and invited other countries to follow the president’s lead on trade and economic policy.
He drew a line between trade disputes and Greenland. “What President Trump is threatening on Greenland is very different than the other trade deals,” he stated, insisting U.S. membership in NATO remains solid.
He cited the United Kingdom ceding the Chagos Islands, in the Indian Ocean — which hosts the U.S. military base at Diego Garcia — to Mauritius as a reason for direct American control of Greenland: “I can see why the president believes that for U.S. engagement we do not want another Diego Garcia on our hands.”
The dispute has rattled the summit. After the Norwegian Nobel Committee declined to award him the Nobel Peace Prize, Trump texted Norwegian Prime Minister Jonas Gahr Støre that he no longer felt “an obligation to consider purely of peace.” Finnish President Alexander Stubb worried the crisis would sideline Ukraine. Even Russian Foreign Minister Sergey Lavrov weighed in, comparing Greenland to Crimea on Tuesday.
Greenlandic Prime Minister Jens-Frederik Nielsen stated his government must prepare for the possibility of U.S. military action, calling for a larger military presence on the island.
As the transatlantic clash unfolded, Chinese Vice-Premier He Lifeng seized the opportunity to position Beijing as a voice of reason. “Tariffs and trade war have no winners,” He stated, criticizing “unilateral acts” that violate World Trade Organization principles. He cast Beijing as the defconcludeer of free trade and multilateralism — though he complained that “when China wants to acquire, other countries don’t want to sell,” a jab at U.S. restrictions on advanced microchips.
Canadian Prime Minister Mark Carney, speaking later at the forum, warned against accommodation. “There is a strong tconcludeency for countries to go along to obtain along. To accommodate. To avoid trouble. To hope that compliance will acquire safety,” he stated. “It won’t.”
European leaders hoped to apply Davos to press for more U.S. commitments on Ukraine security guarantees, but the Greenland crisis has complicated coordination. Macron proposed hosting a G7 summit Thursday afternoon in Paris — with Russia invited “in the margins” — followed by a dinner with Trump. That conflicts with emergency EU talks scheduled Thursday night in Brussels.
Von der Leyen concluded her address with a challenge: “The world has alterd permanently. And we required to alter with it.” Whether that alter leads to renewed partnership or deepening division may become clearer when Trump takes the Davos stage Wednesday morning.
Courthoapply News correspondent Yuval Molina is based in Brussels, Belgium.
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