Trump’s Greenland tariff threat looms over Davos, WEF chief warns of tough talks

Trump’s Greenland threat overshadows Davos talks

US President Donald Trump’s renewed threat to hit Europe with tariffs unless Greenland is handed over to the United States is set to cast a long shadow over this week’s World Economic Forum in Davos, with WEF President and CEO Borge Brende warning of difficult talks between Washington and its partners.

Speaking to CNBC-TV18, Brende said tariff tensions were likely to dominate conversations in Davos. “I think there will be quite tough dialogues here, and frank dialogues, as they say in diplomacy, around those topics, including tariffs,” he said, noting that disputes over tariffs between the United States and various stakeholders have persisted for nearly a year.

Brende said Trump remains keen to attend the Davos meeting to engage directly with global business leaders, with around 850 chief executives from across the world expected at the forum this year.

His remarks followed Trump’s announcement on Saturday of sweeping tariffs on eight European countries — Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain. All eight nations have agreed to contribute personnel to a NATO exercise in Greenland. Trump has linked the tariff threat to what he described as growing geopolitical risks around the Arctic territory, while reviving his long-standing interest in acquiring Greenland from Denmark.

Brende said Europe is acutely aware of its delicate position amid growing rivalry between major powers and will seek to maintain open channels with both Washington and Beijing. “I think that Europe is very conscious about not ending up between the rock and the hard place,” he said, adding that dialogue with the United States would continue given its importance as an export market for European economies.

At the same time, Europe is also working to strengthen engagement with China. Brende pointed to German Chancellor Frederick Merz’s planned visit to Beijing immediately after Davos to meet President Xi Jinping, describing it as evidence of a “new context” in which global business now operates and signalling that new patterns of international economic engagement are emerging.

Trump’s latest tariff threat comes against a backdrop of a series of assertive foreign policy moves in recent weeks, including ordering a special operation aimed at Venezuelan President Nicolás Maduro, claiming Ukraine is less willing to pursue peace than Russia, and threatening action against Iran if protests are violently repressed.

Despite the geopolitical uncertainty, Brende said global economic growth has remained unexpectedly resilient. “But the economy has been very, very resilient, and we do still expect more than 3% economic growth this year,” he said, while cautioning that any escalation in conflicts could undermine prosperity.

He highlighted frontier technologies, particularly artificial intelligence, as a key driver of growth, noting that around $1.5 trillion was invested in AI and related technologies last year alone. However, he also warned of record levels of sovereign debt worldwide. “We have not seen this kind of global debt on governments since 1945,” he said, adding that higher growth remains the only sustainable solution, even as defence spending rises amid global mistrust.

Addressing concerns over a potential AI bubble, Brende said such a scenario was unlikely but could not be ruled out, given heavy US investment and uncertain returns. “Even if there is a correction in the market, I think artificial intelligence and frontier technologies will be there, and will shape this century,” he said.

On global trade, Brende noted a shift away from multilateralism towards bilateral and plurilateral deals. “The trade multilateral system has changed… countries now are rushing towards bilateral agreements,” he said, while pointing out that digital trade and services continue to expand even as trade in manufactured goods slows.

Brende also expressed confidence in India’s economic trajectory, calling recent reforms “quite impressive” and suggesting India could account for up to 20% of global growth this year. He added that India is among the world’s fastest-growing major economies and said he hoped New Delhi and Washington could move towards a trade agreement in 2026.