A Nobel Prize–winning economist says President Donald Trump walked into Davos looking for a showdown — and walked out looking smaller than he intended.
Paul Krugman argues that Trump’s appearance at the World Economic Forum in Switzerland didn’t deliver the intimidation the White House seemed to be chasing. In a post on his Substack, Krugman wrote that Trump and his team appeared determined to insult European leaders and pressure them into concessions — particularly by floating the threat of financial retaliation.
Krugman described the approach as a kind of blunt-force diplomacy, writing: “Donald Trump and his team clearly went to Davos determined to demean and insult their hosts.” He added that Trump seemed to believe Europe would back down under pressure.
Instead, Krugman says the opposite happened. “Trump may have imagined that the Europeans would cower in the face of his wrath. Instead, they humiliated him,” he wrote. According to Krugman, Trump ultimately eased off his latest tariff threats in exchange for a “framework” that, in his view, produced no meaningful new gains for the United States — while strengthening Europe’s resolve.
Krugman also mocked what he called the administration’s lack of basic understanding about the region, pointing to Trump’s claim during his Davos remarks that “without us, you’d all be speaking German.” Krugman noted the irony: most Swiss speak German.
The backlash, Krugman suggested, wasn’t just rhetorical. He pointed to “Operation Arctic Endurance,” described as the deployment of European military forces to Greenland, as both a strategic move and a political message. Krugman wrote that the deployment reflected calculation — but also frustration, a signal that European leaders were finished trying to placate Washington’s threats.
He argued that when Trump warned he could impose tariffs on exports from countries that sent troops to Greenland, Europe didn’t fold. Instead, Krugman wrote, European leaders prepared retaliatory measures aimed at U.S. businesses.
Krugman’s broader takeaway was that accommodating a strongman approach only emboldens it — while resistance can blunt it. “Appeasing a bully doesn’t work,” he wrote, adding that Davos showed that standing up to Trump can.
He ended with a challenge aimed domestically: whether influential figures in the United States will absorb the same lesson — and how soon.
