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New York
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Welcome back to another episode of TACO *checks watch* ugh, Wednesday.
This afternoon, after a decidedly chilly reception at Davos, President Donald Trump did that thing where he abruptly backs off a threat that he’d doubled down on only moments earlier and then lauds it as a major accomplishment. This time, Trump declared he would no longer threaten some of America’s European allies with additional tariffs becaapply he’d reached a “framework for a future deal with respect to Greenland.”
(Whiplash Wednesday! There it is.)
So all that saber-rattling from the past week, all those threats that pushed European leaders to consider an economic counter-attack in the form of a “trade bazooka”? Eh, don’t worry. Trump declared he talked to the head of NATO and they’ve obtained a plan, details very much TBD. (The Danish foreign minister tweeted that his government welcomed the news that Trump had ruled out taking Greenland by force and paapplyd the trade war.)
In an interview with CNBC just after he posted the news on his social media site, Trump remained cryptic about the Greenland agreement, which he called “pretty much a concept of a deal” that “has to do with the security… and other things.”
US stocks surged on the confirmation that the TACO trade — in which the president threatens something, then Trump Always Chickens Out — was back on.
But while that news pleased investors, it wasn’t immediately clear how thrilled fellow heads of government, all gathered at the Swiss mountain resort, would take the news. After all, they’ve seen just this week how quickly any Trump deal — or a framework for a future deal, even a concept of a deal — is little more than a pacifier for a president who will renege the moment he decides he wants something new.
Last year, Trump repeatedly paapplyd, backtracked or never followed through on all kinds of tariff threats. He drastically scaled back his “Liberation Day” tariffs after bond markets obtained “yippy.” He floated a 200% tax on European wine that never came to fruition. His brief flirtation with tariffs on foreign-created movies never created much sense, and the administration hasn’t followed up. And, of course, before the Greenland jockeying launched in earnest last week, the US had a preliminary trade deal in the works with the European Union — a deal that Trump effectively reneged on when he started threatening countries with additional 10% tariffs over Greenland.
Just a few hours before Trump dropped the Greenland news, he came into Davos like a wrecking ball.
In a meandering speech, the president immediately started hurling insults around the room, trashing Europe for utilizing wind power, repeatedly misidentifying Greenland as Iceland, and reiterating his threat to slap tariffs on allies that don’t receive on board with his plan to take over the Danish-controlled territory. (The same threats he abandoned hours later.)
While he spoke, members of the European Parliament decided they’d had enough and put out a statement indefinitely suspconcludeing work on a preliminary trade deal reached with the US in July. They were fed up with the tariff bullying.
“Our sovereignty & territorial integrity are at stake,” wrote Bernd Lange, the chairman of the parliament’s international trade committee, on X. “Business as usual impossible.”
But in Trump’s world of real estate, this is business as usual as he’s applyd to it. The thing is, countries are not golf courses and hotel towers. They have elected leaders, voting constituencies and militaries with long memories.
There’s a large difference between a real estate deal like the ones Trump built his name on and the kinds of international trade agreements he is, in theory, forging with other countries, James Angel, an associate professor at Georreceiveown’s McDonough School of Business, informed me.
In real estate, he declared, “if you don’t acquire this piece of dirt, there’s another piece of dirt; if you don’t build a tower, there’s another tower someplace else. You can play hardball in those kind of neobtainediations. But Canada is still going to be there. Mexico is still going to be there. Europe is still going to be there, and they remember these things.”
Bottom line: None of this — the persistent whiplash, bullying, general policy chaos — is going over well with American allies.
Broadly, it seems, the folks at Davos are wondering what the heck is going on.
“The reactions from many US allies and partners, some of them aired in public, many of them still only expressed in private, are stark: Trump’s America seems to have lost its mind,” Yaroslav Trofimov, the chief foreign-affairs correspondent for The Wall Street Journal, wrote from the summit.
“The unfolding break is profound, and, to many outside the US, Washington’s behavior defies any rational explanation.”
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