Welcome back to another installment of TACO checks viewership whew, Wednesday.
This afternoon, following what appeared to be a decidedly chilly reception in Davos, President Donald Trump executed what seemed like a sharp reversal on a threat he had only just doubled down on, subsequently praising the move as a major win. This time, Trump announced he would no longer menace certain American allies in Europe with further tariffs, claiming he had secured a “framework for a future agreement on Greenland.”
So, all that sword-waving last week, all those threats that prompted European leaders to contemplate an economic counterstrike using the “trade bazooka”? Hey, no sweat. Trump said he spoke with the head of NATO, they have a plan, specifics are pending. (The Danish Foreign Minister tweeted that his government welcomed the news that Trump had dismissed the notion of a forceful takeover of Greenland and paused the trade war.)
In a CNBC interview immediately following the social media announcement, Trump remained coy about the Greenland arrangement, which he termed “practically a concept for a deal” that is “tied to security… and other things.”
American stocks surged on confirmation that the TACO deal—in which the President threatens something, only for “Trump to cave”—was back on.
However, while investors cheered the news, it wasn’t immediately clear how enthusiastically the fellow heads of government gathered at the Swiss mountain resort would greet it. After all, just this week they witnessed how swiftly any Trump deal—or framework for a future agreement, even a concept of a deal—can devolve into nothing more than hot air for a president willing to discard it the moment he decides he fancies something new.
Last year, Trump repeatedly paused, backed down, or outright failed to implement all sorts of tariff threats. He dramatically rolled back duties on “Liberation Day” after bond markets cheered. He imposed a 200% tax on European wine that never materialized. His brief flirtation with tariffs on foreign films never made logical sense and the administration didn’t follow through. And, of course, before the serious Greenland sparring began last week, the US already had a preliminary trade understanding with the European Union—a deal Trump essentially jettisoned when he started threatening member nations with additional 10% tariffs over Greenland.
Just hours before tweeting about Greenland, Trump barreled into Davos like a wrecking ball.
In a rambling address, the President immediately began antagonizing the room, criticizing Europe for using wind power, repeatedly misidentifying Greenland as Iceland, and reiterating threats of tariffs against allies who didn’t support his plan to seize the Danish-controlled territory. (The very threats he rescinded just hours later.)
While he was speaking, Members of the European Parliament decided they’d had enough and issued a statement halting work on a preliminary trade agreement reached with the US back in July. They were tired of the tariff pressure.
“Our sovereignty and territorial integrity are at stake,” Bernd Lange, the Parliament’s trade committee chairman, wrote on X. “Business as usual is not possible.”
But in Trump’s real estate world, business as usual—as he knows it—is the norm. The reality, however, is that countries are not golf courses or hotel towers. They have elected leaders, constituencies, and militaries with long memories.
There’s a vast gulf between the property deals like those upon which Trump built his renown and the international trade agreements he theoretically strikes with other nations, James Angel, an associate professor at Georgetown’s McDonough School of Business, told me.
In real estate, he elaborated, “if you don’t buy this piece of land, there’s another piece of land; if you don’t build a tower, there’s another tower somewhere else. You can play hardball in those negotiations. But Canada will still be there. Mexico will still be there. Europe will still be there, and they remember these things.”
The takeaway: none of this—the constant shock, the bullying, the general policy chaos—is being taken seriously by America’s allies.
Overall, it seems the Davos crowd is left wondering what exactly is going on.
“The reactions from many US allies and partners, some public, many still voiced only in private, are sharp: Trump’s America appears to have gone rogue,” wrote Jaroslaw Trojanowski, The Wall Street Journal’s chief foreign affairs correspondent, from the summit.
“The unraveling rift is deep, and for many outside the US, Washington’s behavior defies any rational explanation.”
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