“Protectionism is on the rise around the world,” warns Guy Parmelin, President of the Swiss Confederation, as he welcomes WEF delegates to this year’s meeting.
In the WEF congress hall, interim co-chairs Larry Fink and André Hoffmann are delivering welcoming remarks.
It’s not going completely smoothly, Hoffmann’s speech hits a hitch, and he has to be passed a fresh copy of the address from the audience.
UK CEO confidence dips
Even before these latest trade tensions, confidence among global CEOs was weakening.
A new survey of CEOs conducted by PwC found that only three in 10 chief executives were confident in their companies’ revenue growth prospects over the next year, the lowest level in five years.
The annual poll, released at the start of the World Economic Forum’s annual meeting, also found that CEOs are grappling with uncertainty over global political developments, increased cyber threats and technological change.
UK CEOs were notably more pessimistic towards the end of last year; a quarter (25%) expect the domestic economy to decline over the next 12 months - compared to 13% in 2025.
PwC’s survey took place in the run-up to November’s budget, when there was a high level of speculation about what Rachel Reeves might do.
Amid this uncertainty, Germany and India have joined the UK as the second most important destination for investment for global CEOs.
Marco Amitrano, senior partner of PwC UK, insists that the dip in CEO confidence doesn’t mean Britain is broken (as some politicians have claimed).
He says:
“Being the world’s second-most important investment destination for a second-year running should not be underestimated. It demonstrates that the UK still looks stable in a turbulent world.
But in now sharing that position it’s also a wake-up call – other countries are gaining ground and working hard to market themselves globally. As a leading nation, this now points to the need to step up our game, with government and business working together. This means action to support growth sectors, make the most of trade opportunities, and provide the consistency and clarity that underpins investor confidence.
Falling inflation will help lay the groundwork for this, which will in turn build momentum, improve productivity and create opportunity.”
Global stocks tumble while gold and silver rise
Global stock markets and the US dollar have tumbled while gold and silver prices hit record highs, as Donald Trump stepped up his rhetoric over Greenland, threatening fresh tariffs on countries opposed to the sale of the Danish territory to the US.
In Asia, Japan’s Nikkei fell by 1.1%. The main European stock markets are all down around 1.1%, with the UK’s FTSE 100 index losing 1.1%, or 111 points, to 10,083.
US stock markets (which were closed for Martin Luther King Day yesterday) are also set to sell off when Wall Street opens later. The Dow Jones is expected to drop more than 700 points, or 1.4%, while the S&P 500 is seen down more than 100 points, or 1.6%, and the Nasdaq is set to tumble 466 points, or 1.6%.
The dollar fell by 0.8% against a basket of major currencies.
The price of gold, seen as the ultimate safe haven, rose 1.3% to $4,728 an ounce. Silver touched a fresh peak of $94.77 an ounce and is now down 0.5% at $94.23 an ounce.
Meanwhile, yields on UK government bonds, known as gilts, rose, indicating higher borrowing costs. The yield, or interest rate, on the 10-year gilt, the benchmark bond, rose 5 basis points to 4.467%, the highest since 6 January.
Today, the US president threatened to impose 200% import duties on French wines and champagne, amid reports that the French president, Emmanuel Macron, does not want to join his so-called Board of Peace for Gaza.
Scott Bessent, the US Treasury secretary, then warned other countries not to retaliate against the US’s trade tariffs, speaking at a press conference in Davos today.
Trump declared in a Truth Social post on Saturday that eight European countries including the UK, France and Germany, will face tariffs “until such time as a Deal is reached for the Complete and Total purchase of Greenland”. The tariffs are due to start at 10% on 1 February, rising to 25% on 1 June.
Trump also hit out at the UK today, calling the plan by Keir Starmer’s government to hand over sovereignty of the Chagos islands, which host a joint UK-US military base, to Mauritius “an act of great stupidity”.
Updated
Georgieva: Would be good to avoid tit-for-tat trade war
The head of the International Monetary Fund has urged world leaders to avoid a new tit-for-tat trade war.
Speaking to CNBC here in Davos, Kristalina Georgieva warned that renewed trade tensions woud hurt global growth.
Georgieva says:
We had upgraded projections for this year. One of the factors for the upgrade is that the impact of tariffs was muted, there was no tit for tat trade war, and it would be very good if we keep it this way. It would be good for the world economy. It would be good for individual countries.
Incidentally, the Deutsche Bank report into the possibility that Europe might stop buying US government debt due to the Greenland crisis, cited by Scott Bessent today, was released on Sunday.
In it, Deutsche Bank analyst George Saravelos wrote:
Europe owns Greenland, it also owns a lot of Treasuries. We spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America’s largest lender: European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part. Danish pension funds were one of the first to repatriate money and reduce their dollar exposure this time last year. With USD exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing.
Finally, Bessent is asked if he sees Europe as an ally of the United States – and if so, how much economic pain the US is prepared to inflict on the EU.
Bessent returns to his ‘false narrative’ position – accusing the media of “going to the farthest point” rather than waiting for events to play out.
Bessent: 'false narrative' that Europe could dump US Treasury assets
Scott Bessent then denies that European Union countries, and the UK, could exercise the “nuclear option” over the Greenland crisis, and dump their holdings of US Treasuries.
Asked how the Treasury Department, and the White House, would prepare for this, Bessent insists it is a “completely false narrative”, and claims the media are “hysterical” over the issue.
Bessent says there is no talk in European governments about this, which he says was sparked by a recent report by Deutsche Bank which the media ‘latched onto’.
He argues that a plan to dump US Treasury holdings “defies any logic”, pointing out that Treasuries are the basis for financial transactions.
Bessent on tariffs: don't retaliate; sit back and let things play out
Scott Bessent then warns other countries not to retaliate against the US’s trade tariffs announced over the Greenland crisis.
Asked about the uncertainty that companies face, and why any country should enter a trade deal with the US, Bessent tells his press conference here in Davos:
I would say this is the same kind of hysteria that we heard on April 2nd. There was a panic.
[That was the day of Trump’s initial Liberation Day tariffs, which were reversed after a market panic].
Treasury secretary Bessent adds:
What I am urging everyone here to do is sit back, take a deep breath, and let things play out.
The Treasury Secretary reminds us that China’s escalation last year led to 145% and 125% tariffs between the two countries, before that relationship was stabilised.
What president Trump is threatening on Greenland is very different than the other trade deals. So I would urge all countries to stick with their trade deals.
Updated
Bessent: Fed chair announcement could come next week
Q: When will president Trump announce a new chairman of the Federal Reserve to succeed Jerome Powell?
Bessent says there are four “fantastic candidates”, and the decision is up to the president.
I would imagine that he will have an announcement maybe as early as next week.
Bessent then takes a pop at Europe, calling it ‘the centre of the great regulatory morass’.
He points to the recent report from Mario Draghi into European competiveness.
Bessent: Trump policies have delivered a historic economic comeback
US Treasury Secretary Scott Bessent is giving a press conference here in Davos, on economic matters.
Bessent begins by today marks one year since Donald Trump’s return to the White House, declaring tht “by all measures” the US is the strongest place for capital in the world.
Bessent gushes:
President Trump has led a 12-month transformation of the US economy….
President Trump’s policies have delivered a historic economic comeback for both Wall Street and Main Street.
Bessent cites gains in investment productivity, and resilient consumer demand.
He adds that while other countries here in Davos face “ongoing uncertainty”, market participants are seeking a jurisdiction that offers “stability, clarity and scale”.
“The smart money is on America,” Bessent claims, adding:
We invite you all to join in this 250th year and to be part of the next 250 years.
Donald Trump has suggested Britain’s decision to cede the Chagos Islands to Mauritius is among the reasons he wants to take over Greenland.
Karen Harris, managing director of Bain & Company’s Macro Trends Group, says a new post-globalisation era is beginning, amid the ‘Great Transformation’:
“As the World Economic Forum in Davos gets underway, what is more striking than ever given recent events is that 2025 will ultimately be remembered as the year in which neoliberal globalisation ended and the post-globalisation era began. The world seems to be in the early stages of a new multidecadal era we refer to as the Great Transformation, with 2025 likely to ultimately be recalled as the inflection point for its acceleration.
“In the medium and longer term, we expect these changes will be growth drivers. But this time of change is occurring just as one of the most highly exaggerated business cycles in modern history (the post-pandemic cycle) is coming to its end.
“At present, the major global economies are caught in the conflict between reasons to accelerate and reasons to stop, much like a driver with one foot on the gas and another on the brake. The open question for us in 2026 is whether this year will bring a resolution to this clash between the long-term drivers of growth and acceleration and the short-term (business cycle) drivers of recession.”
Reeves plans to refund some visa fees in effort to attract ‘trailblazer’ investment to UK
Rachel Reeves will pledge to refund visa fees for some global businesses on Tuesday, as she flies to the World Economic Forum in Davos aiming to showcase the UK as a haven of stability, despite Donald Trump’s latest tariff threats.
The chancellor, who will be accompanied by the business secretary, Peter Kyle, will hold a series of meetings with business leaders at the annual gathering of the global elite in the Swiss mountain resort.
She will announce tweaks to the visa regime aimed at encouraging “trailblazer” businesses to bring highly skilled staff to the UK – including refunding fees – and speeding up the time it takes to qualify as a sponsor of migrant workers.
“Some countries give you a platform, but Britain gives you momentum. My message at Davos this week is clear: choose Britain – it’s the best place in the world to invest,” the chancellor said in pre-released remarks.
Trump: we'll discuss Greenland in Davos
Yesterday, president Donald Trump said the United States would talk about acquiring Greenland at this week’s World Economic Forum in Davos.
He claimed Denmark cannot protect the country, telling reporters in Florida:
“We have to have it. They have to have this done. They can’t protect it, Denmark, they’re wonderful people.
I know the leaders, they’re very good people, but they don’t even go there.”
Trump also said in a social media post that he had a “good telephone call” with NATO Secretary General Mark Rutte, and that he had agreed to a meeting of “various parties” on Greenland in Davos.
Introduction: Von der Leyen, He, Macron, Carney and Bessent all to speak
Good morning from Davos, where the World Economic Forum is getting underway under the shadow of Donald Trump’s designs on Greenland.
Nearly 3,000 leaders, including more than heads of state and government, are convening in Davos under the theme A Spirit of Dialogue – an optimistic position, given the pressures facing the old world order.
The sight of one NATO member coveting another’s territory, and threatening trade levies if it can’t have it, is anathma to WEF’s identity as a champion of the rules-based, multilateral system.
So, that Spirit of Dialogue will be tested, as European leaders question how to handle a US president who likes to communicate through the big stick of tariff threats.
As we reported yesterday, Europe is now considering retaliation:
It promises to be one of the most consequential, tense and dramatic WEF meetings in years. The US have sent their biggest ever delegation to Davos, including Treasury Secretary Scott Bessent – who told reporters here yesterday it would be “very unwise“ for European governments to retaliate.
As Bessent put it:
“I think it’s a complete canard that the president will be doing this because of the Nobel prize. The president is looking at Greenland as a strategic asset for the United States.”
Greenland isn’t the only crisis overshadowing Davos; Iran, Ukraine, AI bubble fears, and Trump’s choice of the next head of the US Federal Reserve are also on delegates’ minds.
There’s also a lot going on outside the WEF congress centre itself, as many businesses and governments have taken over Davos shops and turned them into their own bases for the week.
So as well as the talking and speechifying, there’ll be business deals being carved up here in the snow.
Trump is due to address Davos on Wednesday in a special address; today we’ll hear from Ursula von der Leyen, president of the European Union, French president Emmanuel Macron, China’s vice-premier He Lifeng, and Canada’s prime minister Mark Carney, with UK chancellor Rachel Reeves also appearing on a panel.
The agenda
9.30am Davos / 8.30am GMT: Conversation with Satya Nadella, CEO of Microsoft
10.50am Davos / 9.50am GMT: Speech: Ursula Von der Leyen, president of the European Union
11.20am Davos / 10.20am GMT: He Lifeng, Vice-Premier of the People’s Republic of China
2pm Davos / 1pm GMT: Speech: French president Emmanuel Macron
2.30pm Davos / 1.30pm GMT: Conversation with Treasury Secretary Scott Bessent
3.30pm Davos/ 2.30pm GMT: Conversation with Sheikh Mohammed bin Abdulrahman Al Thani, Prime Minister of Qatar
4.15pm Davos / 3.15pm GMT: Panel discussion on “Prosperity: Sovereign Yet Connected?” including chancellor Rachel Reeves
