Davos has once again served as a seismograph for the world order (…)
And its Richter scale, which measures the energy released by any seismic movement on the Earth’s surface, has skyrocketed to record highs. The annual WEF summit did not disappoint the vast majority of analysts who warned of the trial by fire that Donald Trump was bringing to the Swiss winter resort. CEOs have also been quick to warn of these stormy summits on the horizon. Several of Davos’ classic surveys of CEOs of multinationals from all over the world agree that, beneath an apparent macroeconomic resilience – slightly upward growth, contained markets and a provisional trade ceasefire between Washington and Beijing – the international order will enter 2026 in a state of greater fragility, more fragmented and more exposed to erratic political decisions, led by Trump’s second term, which is acting as a catalyst for new and more dangerous systemic risks. CEOs are expressing concern about the ongoing tariff offensives, despite the fact that they have been partially contained by the markets in 2025 because, in addition to undermining free trade, they have introduced a transactional logic that erodes the predictability of goods flows and weakens investor confidence. Added to this are structural imbalances—global public debt at 100% of GDP, growing inequality and AI whose promise of productivity has yet to materialise beyond the big techs—which limit the margin for error. Davos does not fear an immediate recession, but it does fear an accumulation of tensions that would reduce the capacity to respond to the next shock. The appreciation of gold, the cautious tone of the IMF and warnings about the independence of the Federal Reserve reveal that, beneath the relative calm, a defensive strategy is already being rehearsed.
The other major message, more political than circumstantial, coming from the business elite in Davos points to Europe and the future of multilateralism. The CEOs have been explicit: if the continent does not correct its overregulation, high energy costs and industrial fragmentation, it will lose relevance to the US and China in key sectors such as defence and AI. But the problem goes beyond competitiveness. Trump’s agenda – from the threat over Greenland to the creation of parallel institutions such as the Board of Peace, a private initiative that claims to “promote stability, restore trustworthy and legitimate government, and ensure lasting peace in areas affected or threatened by conflict” and which, in fact, is a tool in the hands of the White House and its ideological allies to establish its global geopolitical objectives, starting with Ukraine—challenges basic norms of sovereignty, replaces rules with power, and pushes historical allies to seek alternative balances. The classic theory of balance of power reappears. Former partners are beginning to distance themselves from an America perceived as unpredictable and predatory. Looking ahead to 2026, the risk is not only economic, but also geostrategic: a world of blocs, regional rather than global supply chains, and minimal cooperation, where industrial policy and security are intertwined. Davos has issued a warning: adapting to this scenario requires leadership, coordination, and something that is currently in short supply in both Washington and Brussels—a long-term vision.
Lessons from the American gamble on Greenland
- Trump’s pressure is reminiscent of empires in decline, where coercion prevailed in the short term but accelerated the reaction of allies and eroded the legitimacy of global leadership. The USSR invaded Czechoslovakia in 1968 to curb the spread of reformism. Now, Trump is repeating this tactic, but without allies to support it.
- The return of balance against the US. Trump’s foreign policy activates the classic logic of the balance of threats: historical partners reduce dependence and explore alternative alliances in the face of an unpredictable America.
The Canadian Prime Minister becomes the spearhead of resistance to Trumpism
Mark Carney arrived in Davos with a message that many Western leaders hint at but few articulate bluntly: the rules-based international order no longer functions as an operating framework, and continuing to act as if it does is an exercise in hypocrisy and self-deception. The diagnosis carries particular weight given the profile of the person making it. Carney is an anomaly in contemporary politics: the only governor in history of two G7 central banks—Canada’s and England’s—a key figure in the management of the 2008 credit collapse and for years one of the most respected faces of the global technocratic establishment. Precisely for this reason, his intervention at the WEF summit did not sound like an ideological outburst, but rather a reality check. His approach was not an anti-American proclamation, but rather a strategic observation that Donald Trump’s return has normalised coercion, emptied alliances of content and turned interdependence into a weapon of loyalty under threat. For Canada—and other middle powers—the risk is economic, but also existential, of survival, which is why it called for a broader perspective and an end to negotiating alone with a superpower that measures docility as weakness. His speech already has its narrative. The so-called “Carney doctrine” was born in Davos, proposing, rather than a formal break with Washington, a conscious reduction of dependencies and a diversification of alliances contrary to Trumpist dogma; that is, the construction of flexible coalitions between countries with comparable capabilities.
The dilemma is the geopolitical viability of this shift. Trump’s immediate threat—100% tariffs if Ottawa deepens its trade ties with China—confirms Carney’s diagnosis, but also illustrates its limitations. His southern neighbour, which Trump 2.0 wants to turn into a state of the Union, retains formidable coercive power and does not hesitate to use it even against historical allies. Canada’s gamble seeks to gain room for manoeuvre in a world of rival blocs, but it involves economic costs, internal tensions and greater exposure to retaliation. For Europe, the debate is also uncomfortable. Although it shares Carney’s diagnosis, it remains caught between strategic dependence and the difficulty of translating realpolitik analyses into collective action. Carney has named the rupture. However, it remains to be seen how many countries are willing to accept its consequences.
An attempt to restore credibility too late
- The value of Carney’s speech is limited because the cost of the fragmented world order he denounces has fallen on Canada in the form of tariff and geostrategic retaliation. Will there be collective acceptance of compensation, or will the rest of the defenders of multilateralism remain silent?
- Trump’s tariff threat serves as a warning: diversifying alliances is rational, but never free.
Markets on hold and with no intention of retreating, (…) but keeping a close eye on Japan
Wall Street has posted its first two consecutive weeks of declines since June, but the move looks more like a tactical pause than a change in trend. The S&P 500 remains close to historic highs, supported by resilient consumption, the concentration of leadership in large technology stocks, and investment inertia that continues to reward every correction. The almost unanimous expectation that the Federal Reserve will keep rates stable has helped to dampen volatility, even as political noise returns to the scene. Donald Trump’s tariff threats against Europe over its collective defence of Greenland, followed by rapid rectifications, have caused brief but intense shocks, confirming a familiar pattern: disruptive investor shifts followed by subsequent portfolio normalisation. Even so, the dollar continues to weaken, bonds have barely moved, but are recording high yields that do not bode well for blind confidence in the American economy, and flows show a persistent paradox of net institutional capital outflows coexisting with a determined influx of retail investors willing to “buy the dip”. In this context, the risk of Japan has emerged, with economic and monetary instability that is no longer domestic. The collapse of bonds, a volatile yen and the calling of early elections on 8 February are raising fears of a systemic crisis. Prime Minister Takaichi’s explicit warnings about possible intervention – in coordination with the US – are boosting the yen, weakening the dollar and pushing gold above $5,000, reinforcing the logic of global exchange rate action to contain contagion.
Safe havens on the rise, latent anxiety. The selective flight of capital towards safe-haven assets sent another warning signal. Silver has exceeded $100 per ounce for the first time, gold has surpassed $5,100, and platinum is hitting record highs, signs that some capital is already discounting less benign scenarios. Demand is being fuelled on several fronts, notably a weaker dollar, lower real yields and, above all, growing geopolitical and monetary uncertainty. Tensions between Washington and its allies, questions about the Fed’s independence and the perception that economic interdependence can become a coercive tool are reinforcing the appeal of hard assets. Unlike previous episodes, this movement is not a response to widespread panic, but rather a preventive hedge. Stock markets continue to function, but safe-haven assets are intensifying the warning that geopolitical risk is no longer an exogenous factor, but rather a structural variable that is beginning to be priced in on a regular basis.
Stock market fears running high:
- Any disappointment in the profits of large companies or in monetary strategies, especially those of the Federal Reserve, may amplify corrections.
- Relatively low rates continue to justify high prices, but they reduce the margin for error if inflation picks up.
- Investor confidence is sustaining the market, although this is due more to psychological inertia than to a clear improvement in the economic cycle. Japan will set the tone this week.
