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Trump Heads to Davos to Take Greenland
As a U.S. takeover of Greenland looms in the minds of those at Davos, so does the potential trade war Europe may find itself in if it pushes back. (Mandel NGAN/AFP via Getty Images)
Threatened with a catastrophic trade war, Europe is likely to blink.
By Kenneth Rogoff
01.20.26 — Tech and Business
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In 25 years of attending the World Economic Forum in Davos, I have never heard the Europeans as worked up as they are about Donald Trump’s threats to Greenland this week.

To listen to some of them, this is the start of a complete breakdown in the international order: One minute the U.S. is seizing Greenland, the next minute it’s Iceland, and before you can blink, Canada will be forced to become the 51st state. Meanwhile, Vladimir Putin will feel emboldened to move on from Ukraine to the Baltics, and China will start in Asia by gobbling up Taiwan. The only time I have heard Venezuela mentioned is by people amazed at the extent to which it has been forgotten.

As with many Trump policies, the Greenland affair has a nugget of common sense at its core: If Europe cannot defend itself, can it be relied on to help defend U.S. interests in the Arctic, particularly as ice melts and opens up new routes to China and Russia? But even if the diagnosis is correct, one has to worry if the cure is worse than the disease. Breaking up the strong alliance between the U.S. and Europe cannot possibly be good for anyone except China, Russia, and Iran.

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Kenneth Rogoff
Kenneth Rogoff is Maurits C. Boas Professor at Harvard University, and former chief economist at the IMF. His latest book is Our Dollar, Your Problem.
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