Davos 2026 Opens Under Heightened Geopolitical Strain and Monetary Policy Concerns

The annual World Economic Forum (WEF) begins this week in Davos, Switzerland, with a roster of political and corporate leaders arriving amid the sharpest friction among traditional allies in decades. The meeting, officially themed “The Spirit of Dialogue,” is set against a backdrop of trade threats, questions about military alliances and an unprecedented inquiry into the independence of the U.S. Federal Reserve.

Allies at odds heading into the Alps

U.S. President Donald Trump arrives in Davos after opening 2026 with initiatives that have unsettled partners across Europe. His recent warning of new tariffs on European nations that declined to back his effort to acquire Greenland has drawn objections from Brussels, Paris, Copenhagen and Nuuk. The dispute adds to wider unease over his administration’s posture on Venezuela, Iran and the stalled search for a durable peace in Ukraine.

The president is scheduled to address the forum on Wednesday, two days after several other leaders deliver their own assessments of global security and trade. European Commission President Ursula von der Leyen, French President Emmanuel Macron and Canadian Prime Minister Mark Carney are slated to speak on Tuesday. All three are expected to underline the need to protect the North Atlantic Treaty Organization as speculation grows about the long-term future of the alliance. Trump’s statements suggesting possible military action around Greenland have placed the continuation of NATO on the summit agenda in a way few policymakers would have anticipated just a year ago.

Diplomats indicate that the Group of Seven could hold an impromptu gathering on the sidelines of the forum, nominally to advance talks between Russia and Ukraine. Even if convened, discussions are likely to extend to the broader credibility of NATO and to the durability of other post-war institutions that the WEF’s own Global Risk Report says are “under siege.”

China’s economic strength and corporate calculations

Vice-Premier He Lifeng represents Beijing on Tuesday, confronting a global audience only weeks after Chinese customs data showed the country posting a record trade surplus above $1 trillion for 2025. While Washington and Beijing are observing a fragile trade truce, business leaders remain cautious. Nvidia Chief Executive Jensen Huang will share the stage with other executives seeking clarity on supply chains and advanced-technology rules as geopolitics increasingly shapes corporate strategy.

Central-bank independence under the spotlight

Monetary policy, traditionally a domain of relatively quiet debate in Davos, moves to the forefront this year. The U.S. Department of Justice has opened a criminal probe into Federal Reserve Chair Jerome Powell, prompting a rare public response from central bankers worldwide. Powell said the investigation centers on whether the Fed can continue setting interest rates without political interference. A letter backing him was signed by European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and additional counterparts.

Former ECB President Jean-Claude Trichet told CNBC that markets were underestimating the gravity of the probe. His warning amplifies concerns that the episode could erode confidence in the ability of central banks to act independently at a time when global inflation, supply-chain realignments and demographic pressures all require nimble monetary responses.

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Program highlights

The opening day’s agenda features von der Leyen, Macron and Carney, followed later by Vice-Premier He. Trump’s headline address on Wednesday is expected to command the largest audience, with analysts watching for any elaboration on tariff plans and Greenland policy. Thursday’s schedule lists Israeli President Isaac Herzog and German Chancellor Friedrich Merz, whose remarks are likely to touch on Middle East tensions and Europe’s economic outlook, respectively.

Broader context for Davos 2026

Since the 2009 forum that followed the global financial crisis, Davos has served as an annual checkpoint for economic and political priorities. Over the years, participants have debated the euro-zone debt crunch, the Arab Spring, Russia’s oscillating influence and the spread of COVID-19. This year adds the possibility of shifts in long-standing defense pacts, the largest recorded Chinese trade surplus and political scrutiny of the U.S. central bank—all converging in the same mountain resort.

Even with tensions running high, the WEF remains one of the few venues where heads of state, ministers, chief executives and civil-society leaders can interact face to face. Negotiators hope that proximity will advance talks on Ukraine and stave off escalations elsewhere. Whether the forum can fulfill its stated aim of fostering dialogue will become clearer as leaders take the stage in the coming days.

Crédito da imagem: Leonie Kidd