Davos Grapples with the Specter of a New American Trade War
Global leaders at the World Economic Forum confront rising geopolitical risks and the daunting prospect of a return to 'America First' economic policies.
DAVOS, SWITZERLAND – While the official theme of the 2026 World Economic Forum is "A Spirit of Dialogue," the conversations coursing through the Alpine resort town are dominated by the specter of conflict. Global business and political leaders are grappling with a landscape of heightened risk, headlined by the potential return of a disruptive 'America First' trade agenda.
The prospect of a second Trump administration has cast a long shadow over the proceedings, forcing investors and corporate strategists to prepare for a new wave of volatility. The primary concern centers on the potential for aggressive and unpredictable tariff measures that could unravel established global supply chains and ignite new trade disputes.
Concerns are not merely hypothetical. According to reports, former President Trump is threatening a new 10% tariff on European imports, which could escalate to 25% if his demands regarding the sale of Greenland are not met. This follows a more concrete step taken on January 15, when the administration imposed a 25% tariff on certain advanced computing chips, including high-end models from Nvidia and AMD, citing national security concerns.
This trend aligns with a stark warning issued in the WEF's 2026 Global Risks Report, which identified "geoeconomic confrontation" as the most severe global risk for the coming year. The report highlights a growing tendency for major powers to utilize trade, technology, and financial leverage as instruments of political influence, leading to a more fragmented and less predictable world economy.
"The weaponization of economic policy is no longer a tail risk; it is a baseline assumption for C-suites and investors," one portfolio manager attending the forum noted. "It forces a fundamental rethink of market access, supply chain resilience, and capital allocation. The cost of doing business is rising, and that cost is uncertainty."
This anxiety is creating a palpable 'risk-off' sentiment. Corporate leaders in Davos are speaking less about boundless expansion and more about building resilience, diversifying supply chains away from geopolitical hotspots, and hedging against currency and trade fluctuations. The upcoming joint review of the US-Mexico-Canada (USMCA) trade agreement in July 2026 is another potential flashpoint on the horizon, with fears that it could be opened up for a contentious renegotiation.
Beyond trade, discussions here have also focused on wider geopolitical instability, from ongoing conflict in the Middle East to rising populism in Europe. According to an analysis by Time magazine on global risks, the combination of an assertive U.S. foreign policy and a fractured global order creates a deeply unstable environment. As the world's elite depart the Swiss mountains, they take with them not a spirit of renewed cooperation, but a clear directive to brace for impact.