As the new president’s executive orders rolled in, Europe's leaders pushed back hard. Welcome back to our Need to Know: Davos newsletter! Day One at the World Economic Forum’s Swiss mountaintop gathering was all Donald Trump, all the time (business and world leaders: they’re just like us). As the new U.S. president’s executive orders rolled in, European leaders pushed back hard — doubling down on climate action, small-D democratic values, and their economic muscle against a newly deregulated America. While Trump has yanked the U.S. from the Paris climate agreement (again), European Commission President Ursula von der Leyen defended it. The 2015 accord remains “the best hope for all humanity,” she said in her speech at Davos, pledging that “Europe will stay the course, and keep working with all nations that want to protect nature and stop global warming.” Meanwhile, Trump’s eyebrow-raising territorial interests of dubious legality — from Greenland to Canada to the Panama Canal — drew sharp warnings from Alain Berset, the former Swiss president who heads the Council of Europe. While acknowledging Trump’s democratic election, Berset painted a stark picture in an interview with the Associated Press: “We are witnessing a backsliding in democracy everywhere in the world, even in the most advanced democracy. It is a movement into the bad — in the wrong direction.”
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Photo: Getty Images (JIM WATSON / AFP)
Welcome back to our Need to Know: Davos newsletter!
Day One at the World Economic Forum’s Swiss mountaintop gathering was all Donald Trump, all the time (business and world leaders: they’re just like us). As the new U.S. president’s executive orders rolled in, European leaders pushed back hard — doubling down on climate action, small-D democratic values, and their economic muscle against a newly deregulated America.
While Trump has yanked the U.S. from the Paris climate agreement (again), European Commission President Ursula von der Leyen defended it. The 2015 accord remains “the best hope for all humanity,” she said in her speech at Davos, pledging that “Europe will stay the course, and keep working with all nations that want to protect nature and stop global warming.”
Meanwhile, Trump’s eyebrow-raising territorial interests of dubious legality — from Greenland to Canada to the Panama Canal — drew sharp warnings from Alain Berset, the former Swiss president who heads the Council of Europe. While acknowledging Trump’s democratic election, Berset painted a stark picture in an interview with the Associated Press: “We are witnessing a backsliding in democracy everywhere in the world, even in the most advanced democracy. It is a movement into the bad — in the wrong direction.”
Business leaders were split between Trump’s promises and Europe’s potential. One chief executive told CNBC that Trump would give “America a really good chance to revive its animal spirit.” But Banco Santander Executive Chair Ana Botín pushed back against Europe’s perceived decline. “We are not a museum,” she said, while calling for smarter growth frameworks that address AI and wealth redistribution. “We have a huge amount of startups. The issue is they start here and then they go to the United States.”
Notably absent from Trump’s first 24 hours: any mention of Ukraine. Despite campaign promises to swiftly end Russia’s three-year invasion, Ukrainian President Volodymyr Zelenskyy seems to have read the writing on the wall. His Davos message was clear — Europe needs to fend for itself. “Right now, all eyes are on Washington,” he told the crowd, “but who’s actually watching Europe at the moment?”
Bitcoin’s meteoric rise found a cheerleader in Binance CEO Richard Teng, who predicted even greater heights for the cryptocurrency in 2025. Speaking during a fireside chat in Davos, Teng pointed to Trump’s regulatory stance as a key catalyst. “This year will be a year that we see a new all-time high for the crypto industry,” he said, citing expectations of “much clearer regulation” under the new administration.
Coinbase CEO Brian Armstrong echoed the sentiment: “The Trump effect cannot be denied,” he said at a different panel in Davos, noting the significance of “the leader of the largest GDP country in the world come out undeniably and say that he wants to be the first crypto president.”
Bitcoin already shattered the $100,000 barrier last year, fueled by market confidence in Trump’s crypto-friendly policies. The cryptocurrency is at $103,000 on Tuesday.
While crypto execs bet on a Trump-fueled boom, UBS CEO Sergio Ermotti was busy pouring cold water on hopes for quick interest rate cuts. His warning? Trump’s promised tariffs could keep inflation stubbornly high.
“Tariffs will probably not really help inflation to come down. And therefore I don’t see rates coming down as fast as people believe,” Ermotti told CNBC, adding a cautionary note about inflation being “much more sticky than we have been saying.”
Speaking of tariffs, China’s Vice-Premier Ding Xuexiang struck a pointed note in his special address, warning that “protectionism leads nowhere” and “trade war has no winners.” Trump didn’t declare any tariffs on China on the first day of his administration as promised (and he seems to be softening his language around them). But he did threaten 25% tariffs on Mexico and Canada as soon as Feb. 1, claiming the countries hadn’t met his criteria to avoid them.
The head of the world’s largest sovereign wealth fund, Nicolai Tangen, joined the chorus of concern. “Many of the suggestions now coming out of the U.S. are potentially inflationary,” the Norges Bank Investment Management CEO warned, pointing to tariffs as a major market risk for 2025. He must have also spoken to the same CEOs that CNBC did, since Tangen also said some of these policies could bring out the “animal spirit” of America.
From trade wars to animal spirits, from crypto surges to European soul-searching, Day One in Davos played out like a preview of the year ahead.
Tomorrow, we’ll be back with more from the Alps, where even the topics that aren’t about Trump somehow still end up being about Trump.
—Jackie Snow