Trump's Deals: Europe Learns a Hard Lesson

Welcome back to another episode of TACO *looks at watch* phew, Wednesday.

This afternoon, after a decidedly chilly reception in Davos, President Donald Trump did that thing of abruptly backing away from a threat he had just doubled down on moments earlier and then praising it as a major achievement. This time, Trump said that he would no longer threaten some of the United States’ European allies with additional tariffs because he had reached a “framework for a future agreement regarding Greenland.”

(Wednesday whiplash! There it is.)

So all that saber-rattling last week, all those threats that caused European leaders to consider an economic counterattack in the form of a “commercial bazooka”? Hey, don’t worry. Trump said he spoke with the head of NATO and that they have a plan, details still to be defined. (Danish Foreign Minister wrote in X q(His government celebrated the news that Trump had ruled out taking Greenland by force and paused the trade war).

In an interview with CNBC just after posting the news on his social media platform, Trump remained cryptic about the Greenland deal, which he called “basically a concept deal” that “has to do with security… and other things.”

But while that news pleased investors, it was not immediately clear how enthusiastic their counterparts, all gathered at the Swiss mountain resort, would be. After all, you’ve already seen this week how quickly any Trump deal — or a framework for a future deal, even a concept deal — is nothing more than a pacifier for a president who will back out the moment he decides he wants something new.

Las US stocks rebounded after confirmation that the TACO trade operation — in which the president threatens something, but then Trump always backs down — was back.

But while that news pleased investors, it was not immediately clear how the other heads of government, all gathered at the Swiss resort, would react to it. After all, just this week you saw how quickly any Trump deal — or a framework for a future deal, even a concept deal — is nothing more than a roadblock for a president who will back down as soon as he decides he wants something new.

Last year, Trump repeatedly paused, backed off or never followed through on all sorts of tariff threats. Drastically reduced its tariffs “Liberation Day” after bond markets became “nervous.” He proposed a 200% tax about European wine that never materialized. His brief flirtation with tariffs on foreign films It never made much sense. and the Government did not follow up. And, of course, before the dispute over Greenland began in earnest last week, the United States had a preliminary trade deal in place with the European Union — a deal that Trump effectively quit when he began threatening countries with additional 10% tariffs on Greenland.

In an erratic speech, the president immediately began hurling insults around the room, criticizing Europe for using wind energy, repeatedly confusing Greenland with Iceland, and reiterating his threat to impose tariffs on allies who did not join his plan to take territory controlled by Denmark. (The same threats he abandoned hours later.)

A few hours before Trump dropped the Greenland news, it hit Davos like a wrecking ball.

As he spoke, members of the European Parliament decided they had had enough and issued a statement indefinitely suspending work on a preliminary trade deal reached with the United States in July. They were fed up with tariff harassment.

“Our sovereignty and territorial integrity are at stake,” wrote Bernd Lange, chairman of parliament’s International Trade committee, in X. “Business as usual impossible.”

But in Trump’s real estate world, this is indeed business as usual, as he is accustomed to. The problem is that countries are not golf courses or hotel towers. They have elected leaders, voting voters, and military forces with good memories.

There’s a big difference between a real estate deal like those that made Trump famous and the kind of international trade deals he’s theoretically forging with other countries, James Angel, an associate professor at Georgetown’s McDonough School of Business, told me.

In real estate, he said, “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 kinds of negotiations. But Canada is still going to be there. Mexico is still going to be there. Europe is still going to be there, and they remember these things.”

In short: None of this — the persistent back-and-forth, the bullying, the general policy chaos — is going down well with American allies.

Overall, it seems like people in Davos are wondering what the hell is going on.

“The reactions of many US allies and partners, some expressed publicly, many still only expressed privately, are stark: Trump’s America appears to have lost its mind,” wrote Yaroslav Trofimov, the chief foreign affairs correspondent. de The Wall Street Journal, from the summit.

“The rift taking place is profound, and for many outside the US, Washington’s behavior defies rational explanation.”

The-CNN-Wire