Day 5: “Davos is over, and Trump won”

In the wrap-up sessions at the World Economic Forum, there was one person mentioned more than any other. By a lot.

The U.S. election in November — and prospect of a Donald Trump victory — was cited as the biggest variable in pretty much every geo-strategic issue, from European defence to the Middle East. Even the pace of interest rate cuts was chalked up to election betting.

This will be a historic year of elections, with more than half the world’s adults eligible to go to the polls. India, Mexico, Indonesia, the European Union — the shape of the world’s political map may look very different in a year’s time. But the U.S. Presidential towers over all else.

There was so much talk of Trump that Alex Soros, son of Trump antagonist George Soros, said the World Economic Forum had already crowned him. “Davos is over and Trump won,” Soros said. “And that’s good news because Davos is usually wrong.”

David Rosenberg, the billionaire investor, said Trump would win if the election were today, as he’s polling first in all five swing states that he lost in 2020 (Arizona, Georgia, Michigan, Pennsylvania, Wisconsin).

Rosenberg expects the U.S. Federal Reserve to cut interest rates three or four times before summer to get ahead of the formal campaign — and to avoid Trump’s likely accusations that it’s trying to favour Joe Biden.??

This year’s WEF began on the day that Trump won a landslide in the Iowa caucuses, which kicked off the Republican leadership campaign. He’s expected to secure the nomination in March, putting the world on notice that he’s formally back.

Germany’s finance minister Christian Lindner said Europe needs to start preparing for a Trump presidency, whether it happens or not, by shoring up its own defences, strengthening NATO and bracing itself for more trade disputes. Christine Lagarde, head of the European Central Bank, agreed, saying Europe needs to start “playing from a position of strength.”

A Trump presidency could embolden Vladimir Putin, who would benefit even more if the European Parliament adds more far-right members, as polling suggests it will. A GOP White House and Senate would also spell trouble for a range of environmental policies, perhaps even threatening America’s commitment again to the Paris climate agreement.?

Rachel Botsman, an author and trust expert at Oxford University, said the U.S. election is about more than America. It could redefine notions of trust for the rest of the 2020s, especially if the outcome is blamed on foreign or digital interference.??She speculated that Trump could even be elected from prison, if convicted on the charges he now faces, which would further challenge America’s self-identity.?

Americans’ trust in government has fallen from 60% to 22% in one generation. Botsman said trust didn’t evaporate; it’s been transferred to other groups and people, further atomizing society.

Ian Bremmer, who heads the Eurasia Group, gave Trump a 60% chance of winning — although stressed his view “is not strongly felt” and he could easily see the race as a 50-50 one.?Bremmer’s view: “U.S. democracy is in crisis.” ?

In the case of a photo finish, the U.S. may be headed for a constitutional crisis, as the presidency could rest in the hands of a single state authority that could refuse to grant its electoral college votes to an indicted person. Or it could fall to the Supreme Court, as the 2000 election did, only this time three of the nine justices were appointed by the challenger.?

If that’s the case, Davos 2025 may continue to focus on one person, whether he’s headed to the White House or not.

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