The World Economic Forum (WEF) is taking place in Davos, Switzerland, this week.
Presidents, PMs, CEOs, bankers, and other "elites" have hopped in their private jets to lecture us peasants about climate change. And of course there will be plenty of plotting, scheming, and discussing geopolitics.
Having so many swamp dwellers packed into such a small area only happens once a year.
Given the chaotic state of the world, it's been a spicy meeting.
The geopolitical chessboard is in flux.
As you all know, President Trump wants to take over Greenland. He believes it's a strategic necessity, for critical minerals, trade route security, and missile defense.
When asked at a news conference how far he would go to acquire the giant frozen territory, he replied, "you’ll find out."
Denmark, which controls Greenland, and the EU have protested loudly.
At Davos, the Belgian Prime Minister was downright rebellious. Here are some of the juicier quotes from PM Bart De Wever's panel at WEF:
"Until now, we tried to appease the new president in the White House. We were very lenient, also with the tariffs, we were lenient, hoping to get his support for the Ukraine war.
We either stand together, or we will stand divided, and if we are divided, there is the end of an era of 80 years of Atlantism really drawing to a close.
...Being a happy vassal is one thing, being a miserable slave is something else. If you back down now, you're going to lose your dignity.
Vassal comes from the latin word vassallus, meaning servant.
So it's shocking to see a European leader refer to the EU as happy servants or "miserable slaves". He's basically admitting that Europe is subordinate to the U.S., which has mostly been true since WW2 ended.
After all, America has military bases throughout Europe, and has a history of getting our way with the EU. For example, when somebody blew up the massive Nord Stream natural gas pipelines from Russia to Germany in 2022, there was essentially no protest or real investigation.
Despite the fact that Biden had threatened to "bring an end" to Nord Stream 2, warning that "If Russia invades, there will be no Nord Stream 2."
The mysterious explosion forced Europe to import more expensive American liquefied natural gas (LNG), and has crippled Germany's industrial sector.
Germany and Europe's public response? Crickets.
But suddenly European leaders are growing a spine. And, more worryingly, looking east for economic growth.
Trump threatened to slap new tariffs on the EU earlier this week.
Then the EU suspended its trade deal with the U.S. yesterday.
President Trump has since paused his new tariffs, and proposed a deal where the U.S. would take control of several key areas in Greenland for military bases and mining of rare earths and other critical minerals.
Even if a deal is reached on Greenland, it's clear that the relationship between the U.S. and EU is strained.
President Trump has essentially told the EU they need to choose between America and China. And Europe is unwilling to do so.
President of the European Commission Ursula von der Leyen stated it plainly in Davos:
"The EU has no intention to decouple from China and welcomes Chinese enterprises to invest in Europe."
And French President Macron echoed this call to expand the EU's economic relationship with China:
"China is welcome, but what we need is more Chinese foreign direct investments in Europe... to contribute to our growth, to transfer some technologies, and not just to export toward Europe."
Ten years ago, EU leaders calling for more Chinese investment and technology transfer would have seemed ridiculous. But here we are.
And as you all have heard by now, Canadian Prime Minister Carney just made a trade deal with China. It will end the 100% tariff on Chinese electric vehicles, and allow 49,000 EVs to be imported this year.
Why did Carney make a deal? China had responded to Canada's 100% EV tariffs with steep tariffs on Canadian agricultural products, especially canola oil. Canadian farmers demanded a deal, and they got it.
Long-term, this could spell trouble for both U.S. and Canadian auto sectors. Yet Canada made the deal anyway.
Needless to say, President Trump is not happy about any of this.
The world is changing. We're no longer the sole superpower, as we discussed in Birthing Pains for a Multipolar World.
This adjustment is not going to be easy for our "elites" to accept. They're accustomed to dominating the planet.
NATO has been a key aspect of America's dominion over the world. And if this discord between the EU and America continues, it's quite possible NATO will fall apart.
President Trump has been prodding our European allies to contribute more to defense, and they're reluctantly pitching in more. But they are clearly unhappy with the lopsided power dynamic.
Europe appears to be breaking from the U.S. for the first time in decades. It seems likely they will continue to build economic ties with China, whether Trump likes it or not.
Some have speculated that this is just a negotiating tactic by EU countries. I don't think so. They are seriously questioning NATO and the broader relationship with America.
NATO could dissolve as soon as the next major recession/market crash. The inevitable budget crunches, inflation, and chaos will strain this relationship even further.
NATO has essentially been an American project from the start. Its failure wouldn't necessarily be a bad thing for the U.S.
Protecting multiple continents is unsustainable long-term. Too much money, too much political capital expended. Like every other empire in history, the American one expanded too ambitiously.
So the inevitable NATO breakup is not something to fear. It's simply part of this new multipolar world.
More concerning is the rise of China, and our so-called allies' eagerness to partner with them despite Trump's ultimatum to pick sides.
It's the most obvious sign of a shifting global power dynamic.
We'll stay on top of this story as it develops.
The Daily Reckoning