On The Deals Shaping Our Economy
🚨 1 Big Thing: Trump Cools the Jets
Good morning. President Trump abruptly dropped his threat to slap tariffs on European allies and ruled out military force in Greenland on Wednesday, de-escalating a crisis that had rattled the transatlantic alliance.
Why it matters: Markets instantly rebounded from a week of jitters, with investors cheering the pivot from "invasion" rhetoric to transactional diplomacy.
The news: Trump announced he would not follow through on tariffs scheduled for Feb. 1 after a "productive meeting" with NATO Secretary-General Mark Rutte.
He claims the two hashed out a "framework of a future deal" for Greenland and the "entire Arctic Region".
The pivot: Trump told reporters the military option is "not on the table," saying, "I don't have to use force. I don't want to use force".
🌍 Global Temperature Check
European leaders are fuming despite the de-escalation rhetoric. The mood in Davos is tense:
Heckled: U.S. Commerce Secretary Howard Lutnick was jeered at a private dinner, causing walkouts—including ECB President Christine Lagarde.
"Unacceptable": Former UK PM Rishi Sunak warned that Trump's tactics have "damaged people's trust" and called any sovereignty transfer "hugely problematic".
NATO distractions: Secretary-General Mark Rutte is working "behind the scenes" but warned the Greenland spat risks diverting focus from Russia's war in Ukraine.
The view from Wall Street:
Jamie Dimon, CEO of JPMorgan Chase, slammed the "Davos intellectual elite" for failing to make the world better, arguing Trump was right to point out NATO's weaknesses.
Ken Griffin, Citadel CEO, took the opposite view, criticizing the administration for having "frayed our relationship" with European allies in ways he doesn't "understand or appreciate".
📉 Market Watch
Investors exhaled slightly. Global stocks recovered some losses as Trump spoke, with the S&P 500 rising 0.4%.
The flight to safety: Gold had spiked 2% earlier in the day as the alliance plunged into its "deepest crisis in decades".
⚡ Quick Hits
Venezuela pivot: Trump claimed Venezuela will do "fantastically well" following a U.S. operation to remove Nicolás Maduro, predicting the country will make more money in six months than in the last 20 years.
Fed watch: The President teased he will name a new Federal Reserve chair in the "not too distant future".
Shots fired: Trump swiped at Canada and Mark Carney ("Canada lives because of the United States") and said parts of Europe are "not even recognisable" anymore.
UK holdout: Prime Minister Keir Starmer told MPs he "will not yield" on Greenland principles despite tariff threats.
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