President Donald Trump is sending a transparent message to allies and adversaries alike that the USA intends to reassert global leadership, in response to Treasury Secretary Scott Bessent, as tensions rise over Trump’s aggressive push to amass Greenland and confront European trade practices.
Speaking with CNBC throughout the World Economic Forum in Davos, Switzerland, Bessent framed the administration’s posture as a return to hard power diplomacy, economic leverage, and strategic positioning. Trump is scheduled to deal with global business and political leaders on the forum, adding further weight to what has turn into one of the vital closely watched gatherings of the yr.
“The U.S. is back, and that is what U.S. leadership looks like,” Bessent told CNBC when asked concerning the president’s agenda.
That declaration comes amid mounting diplomatic friction across Europe and renewed uncertainty in global markets as investors digest escalating tariff threats, military posturing within the Arctic, and widening disagreements over energy, defense spending, and pharmaceutical pricing.
Greenland Push Sends Shockwaves Through NATO
At the middle of the controversy is Trump’s renewed push to bring Greenland under U.S. control, a move that has unsettled European allies and triggered concern inside NATO about alliance unity.
Greenland, while self-governing, stays a part of the Kingdom of Denmark and occupies a strategically critical position within the Arctic. The island sits along key shipping routes which might be becoming increasingly accessible on account of melting ice, and it holds vast reserves of rare earth minerals which might be essential for defense systems, electric vehicles, and advanced electronics.
Trump has repeatedly argued that Greenland is important to U.S. national security, often citing concerns over growing Russian and Chinese influence within the Arctic. The U.S. already operates military facilities on the island, however the administration has signaled that long-term control would supply a stronger defensive and economic foothold.
Bessent echoed that logic in his CNBC interview.
“U.S. control of Greenland was ‘vital,’” Bessent said, adding: “That can stop any sort of a kinetic war, so why not pre-empt the issue before it starts?”
Those remarks come as Denmark reportedly deployed additional troops to Greenland for a military exercise, underscoring how seriously European governments are taking the situation.
Markets have also taken notice. Defense stocks, energy producers, and mining corporations tied to rare earth supply chains have seen increased trading activity as investors position for potential policy shifts and geopolitical escalation.
Tariffs Escalate Trade Tensions With Europe
Compounding the Greenland dispute, Trump announced sweeping latest tariffs overnight, including a 200% tariff on French wines and Champagne. He also criticized the UK for showing what he called “total weakness” by transferring sovereignty of the Chagos Islands to Mauritius.
The tariff announcement rattled European markets and sparked renewed concerns a few widening trade confrontation between Washington and Brussels. European leaders have hinted at possible retaliation, though formal motion has not yet been announced.
Bessent dismissed Europe’s likely response as slow and bureaucratic.
“My guess is their next move shall be to form a working group, the dreaded European working group,” Bessant said.
The remark highlights a broader frustration inside the Trump administration that European governments move too cautiously and sometimes fail to match U.S. urgency on security and trade matters.
For investors, tariff escalation raises the danger of upper import prices, retaliatory trade measures, and volatility in sectors reminiscent of luxury goods, agriculture, transportation, and consumer discretionary stocks. Currency markets also remain sensitive, particularly the euro and British pound, as trade tensions feed into growth expectations.
Defense Spending and the Ukraine War Remain Flashpoints
Bessent also renewed pressure on European governments to extend defense spending and reduce reliance on Russian energy, particularly because the war in Ukraine continues into its fourth yr.
“While the Europeans were constructing schools, having healthcare, we have now been defending the world,” Bessent said.
He criticized Europe’s continued purchases of Russian energy products, arguing that the continent is not directly financing the conflict.
“They’re still buying Russian energy, they’re still buying refined products from India made out of Russian oil, so 4 years in, the Europeans are still financing the war against themselves,” Bessant said.
In line with recent energy data, Europe stays the most important buyer of Russian liquefied natural gas, while still importing a small but meaningful percentage of Russian crude oil through indirect channels. Recent European Union sanctions targeting refined products made out of Russian oil are scheduled to take effect this week, though enforcement and compliance remain key questions.
Energy traders are closely watching whether tighter sanctions could further tighten global supply and push oil and natural gas prices higher. Any sustained spike in energy costs could reignite inflation concerns and complicate central bank policy across Europe and the U.S.
Pharmaceutical Pricing Draws Fresh Scrutiny
One other area of tension involves pharmaceutical pricing, where Bessent accused European countries of benefiting from artificially low drug prices on the expense of American consumers.
He described Europe as “free riding” on medication costs and pointed to recent agreements geared toward narrowing the worth gap between the U.S. and overseas markets.
In December, nine of the most important pharmaceutical corporations signed deals to lower their prices within the U.S. with the goal of regularly aligning pricing with international levels.
“The thought here is equalisation over time, the U.S. consumer and our health services pays less and the Europeans should pay more, they’ve been free riding.”
If implemented fully, the pricing shifts could have meaningful implications for pharmaceutical company margins, healthcare insurers, and government healthcare budgets. Investors in large drugmakers may face pressure on profitability within the near term but may gain advantage from expanded volume and reduced political risk over the longer horizon.
Healthcare stocks reacted modestly following the comments, but analysts caution that regulatory implementation and negotiation timelines could stretch for years.
Mineral Supply Chains and China’s Strategic Grip
Bessent also highlighted growing concerns about China’s dominance in critical mineral supply chains, a difficulty that has turn into central to U.S. industrial policy, defense readiness, and clean energy expansion.
He said he recently met with leaders from the G7 together with Mexico, India, South Korea, and Australia to coordinate efforts to scale back dependence on Chinese-controlled minerals.
The goal, Bessent said, was to “avoid this chokehold that China has on minerals.”
Minerals reminiscent of lithium, cobalt, nickel, and rare earth elements are essential for electric vehicles, advanced weapons systems, renewable energy infrastructure, and semiconductor manufacturing. China controlled greater than two-thirds of rare earth mine production in 2024, giving Beijing significant leverage over global supply chains.
Recent U.S. policy initiatives have focused on expanding domestic mining, reshoring processing capability, and securing alternative supply agreements with allies. Investors have increasingly targeted mining corporations, battery technology firms, and infrastructure projects positioned to learn from this supply chain diversification.
Any acceleration of mineral independence initiatives could create long-term investment opportunities, particularly in North American mining, recycling technologies, and advanced manufacturing.
What This Means for Markets and Investors
The convergence of Greenland geopolitics, tariff escalation, defense spending pressure, energy policy disputes, and mineral supply chain realignment underscores a broader theme: the Trump administration is using economic and strategic leverage more aggressively to reshape global power dynamics.
For investors, several key implications stand out:
- Defense and aerospace stocks may profit from higher global military spending and heightened geopolitical risk.
- Energy markets could remain volatile as sanctions tighten and geopolitical tensions persist in Europe and the Middle East.
- Mining and demanding minerals corporations may even see increased investment flows as governments seek supply chain security.
- Pharmaceutical corporations face evolving pricing pressures that would reshape revenue models over time.
- Currency and bond markets may experience increased volatility as trade disputes influence inflation and growth expectations.
While short-term volatility is probably going, long-term investors may find opportunities in sectors aligned with national security, domestic manufacturing, and strategic resource independence.
Trump’s upcoming address in Davos is anticipated to further make clear policy priorities and potentially introduce latest initiatives or trade warnings. Markets shall be listening closely for signals on tariffs, defense commitments, energy policy, and international alliances.
As Bessent made clear, the administration believes it’s entering a brand new phase of assertive American leadership on the world stage.
“The U.S. is back, and that is what U.S. leadership looks like.”
Whether global markets embrace or resist that shift will shape investment outcomes well into the approaching yr.