By Gustavo de Arístegui
January 22, 2026.
Over the past 24 hours, the geopolitical chessboard has been dominated by President Trump’s reversal on Greenland, the economic impact of that about-face, new macroeconomic data from Asia and Europe, and the consolidation of a European security architecture increasingly distrustful of Washington. Attention has shifted to the Arctic, the transatlantic relationship, and the intensifying strategic competition among the United States, China, and Russia, against a backdrop of global economic slowdown and financial volatility.
I. Brief Introduction
President Trump’s announcement explicitly renouncing the use of force to acquire Greenland, together with his withdrawal of threats to impose new tariffs on several European allies, marks a turning point in the open crisis involving the European Union and NATO. This decision does not signify an abandonment of U.S. Arctic ambitions, but it does represent a tactical correction prompted by firm resistance from European partners at Davos and by the immediate negative impact of his threats on financial markets and gold prices.
From an Atlanticist and liberal center-right perspective, the day leaves an ambivalent impression: relief at the containment of military adventurism and an intra-Western trade war, but also concern over the erosion of trust in American leadership and the parallel advance of China and Russia across the Eurasian space and in strategic commodity markets.
II. Ten Main Stories of the Past 24 Hours
1. Trump Reverses Course on the Military Option and Tariffs in the Greenland Case
Facts
President Trump stated at Davos that he will not resort to the use of force to acquire Greenland and that he is, for the time being, ruling out the new tariffs previously announced against several European allies, following weeks of ambiguity and internal pressure within the White House.
This reversal comes after an intense standoff with European leaders who hardened their position at the Davos Forum, clearly asserting that Greenland’s future belongs to its inhabitants and to Denmark, and warning against any temptation to resort to coercion.
Implications
The withdrawal of the military threat temporarily defuses a scenario that would have symbolized a further rupture of the international order based on the prohibition of territorial acquisition by force—an order already severely weakened by Russia’s actions in Crimea and Ukraine.
By suspending the tariffs, Washington avoids an economic confrontation within the Atlantic bloc that would have further undermined Western cohesion vis-à-vis China and Russia, objectively benefiting Beijing and Moscow.
Outlook and Scenarios
A phase of discreet negotiation can be expected, focused on base agreements, dual-use infrastructure, and preferential access to strategic resources in Greenland, rather than any formal annexation.
The risk remains that presidential reversals of this nature further erode U.S. credibility, prompting European allies to accelerate plans for strategic autonomy and to strengthen their own deterrence capabilities, including French and British nuclear forces.
2. “Relief” Effect in Markets Following the Greenland and Tariff Reversal
Facts
Following Trump’s reversal, the dollar remained stable and Wall Street recorded strong gains, with the Dow Jones rising by nearly 600 points, driven by the removal of the tariff threat.
Gold, which had surged to a new record above $4,800 per ounce amid escalating tensions, began a partial correction, reflecting a reduced perception of immediate systemic risk.
Implications
This sequence confirms that “Trump volatility” has become a structural factor in markets: each threat and each reversal triggers sharp movements that reward those able to anticipate presidential instincts rather than economic fundamentals.
Over the medium term, this cycle of announcements and retractions damages the perception of the United States as an anchor of stability for the international financial system and fuels incentives to diversify toward other currencies and financial centers, including China.
Outlook and Scenarios
If the White House maintains a more predictable approach in its relationship with Europe, markets could consolidate a renewed “risk-on” phase; however, any new shock—whether related to technology, defense, or digital taxation—would likely revive defensive flows toward gold and other safe-haven assets.
This episode underscores the need for coordinated Western economic governance: the EU should use this window to propose clear rules for transatlantic engagement that limit the scope for discretionary tariff escalation in the future.
3. Europe Stands Firm at Davos and Accelerates Its Strategic Autonomy
Facts
At Davos, European leaders demonstrated unusually firm opposition to U.S. threats related to Greenland and tariffs, while discussions are already under way on mechanisms to strengthen European security without exclusive reliance on Washington’s umbrella.
Calls are multiplying to prioritize the procurement of European defense equipment, reinforce autonomous nuclear deterrence capabilities, and explore defense cooperation formats that extend beyond the strict framework of NATO.
Implications
Classical Atlanticism is entering a phase of reassessment: without abandoning the alliance, several European capitals are preparing for a scenario in which the United States becomes a less predictable and more transactional partner, particularly under the current U.S. administration.
From a pro-European perspective, this moment presents an opportunity to build a credible European defense that complements NATO and corrects years of strategic free-riding; however, the risk lies in inefficient duplication of efforts and the emergence of counterproductive anti-American rhetoric.
Outlook and Scenarios
In the short term, the priority will be to strengthen coordination within NATO, leveraging Secretary General Rutte’s presence at Davos to articulate a common language combining firmness and pragmatism in dealings with Washington.
Over the long term, a more autonomous European defense posture may emerge, but also one marked by internal divisions between those advocating deeper ties with the United States and those pursuing an unrealistic equidistance between Washington, Beijing, and Moscow.
4. Japan: Export Slowdown and Doubts About Recovery
Facts
Japanese exports increased by 5.1% in December, below the expected 6.1%, largely due to a sharp decline in shipments to the United States.
This moderation adds to several quarters of weak growth across the Asia-Pacific region, amid cooling global demand and the restructuring of value chains following years of trade tensions and the pandemic.
Implications
The data highlights Japan’s vulnerability—and, by extension, that of much of Asia—to a slowdown in U.S. consumption and to persistent regulatory uncertainty in international trade.
The deceleration opens the door to additional stimulus measures and complicates the Bank of Japan’s monetary normalization efforts, fueling criticism of an implicit “currency war” from partners who view the weak yen as an unfair competitive advantage.
Outlook and Scenarios
If Washington stabilizes its trade policy, Japanese exports could regain momentum; however, a renewed protectionist turn would reignite tensions, forcing Tokyo to accelerate diversification toward Southeast Asia and Europe.
The combination of demographic aging, high public debt, and dependence on external demand will continue to act as a structural constraint, reinforcing Japan’s status as a major diplomatic actor with limited economic growth potential.
5. Asia-Pacific: Fragile Stock Market Rebound and South Korean Slowdown
Facts
Asia-Pacific markets point to a rebound following relief over the avoidance of an intra-Western trade war, as investors digest Trump’s decision to withdraw tariff threats against Europe.
At the same time, South Korea recorded growth of 1.5% in the fourth quarter, below expectations, as domestic demand weakened with the fading impact of fiscal stimulus.
Implications
The rebound in equities represents more of a pause than a solid recovery: Asia remains dependent on Western consumption and supply-chain stability, both of which remain under strain.
South Korea’s slowdown confirms that the export- and credit-driven Asian growth model is showing signs of fatigue, as China reorients its economy inward and geoeconomic fragmentation becomes structural.
Outlook and Scenarios
A scenario of partial decoupling between blocs led by the United States and China will compel capitals such as Seoul, Tokyo, and Singapore to recalibrate their strategic balance and reduce critical dependencies on both powers.
The political risk lies in the possibility that economic frustration fuels populism and nationalism, with direct consequences for territorial disputes in the South China Sea and on the Korean Peninsula.
6. United Kingdom: Rising Inflation and Pressure on the Middle Class
Facts
UK inflation rose to 3.4% in December, above the forecast of 3.3%, prolonging the erosion of purchasing power for households already burdened by years of price shocks.
This development occurs amid relatively high interest rates and an intense debate over the Bank of England’s capacity to continue tightening policy without stifling economic activity.
Implications
Persistent inflation feeds public discontent with political and economic elites, strengthening populist narratives on both the right and the left in a country still searching for its post-Brexit identity.
Pressure on the middle class intensifies cultural battles over identity, migration, and social issues, with both the “law and order” right and a radicalized left competing for frustrated voters, while the political center remains squeezed.
Outlook and Scenarios
If inflation fails to recede decisively in 2026, the UK could enter a phase of chronic political instability, characterized by fragile governments and short-term policymaking.
A shift toward supply-side reforms, targeted deregulation, and selective fiscal relief could help rebuild the social contract, but such an approach requires leadership and clarity that the current political landscape does not guarantee.
7. India: A Giant Caught Between Geopolitics and Internal Constraints
Facts
India’s largest company, with significant exposure to strategic sectors, is facing pressure from external geopolitical tensions alongside a slowdown in domestic retail sales, prompting several analysts to cut price targets.
This situation unfolds as New Delhi seeks to maintain a delicate balance between partnership with the West, historical ties with Russia, and an increasingly competitive relationship with China.
Implications
The episode illustrates that the so-called “India moment” is not immune to shocks: major Indian corporations remain vulnerable to international sanctions, geopolitical realignments, and domestic inefficiencies.
From a liberal standpoint, India must accelerate structural reforms—legal certainty, regulatory simplification, and infrastructure development—if it is to convert demographic potential into sustained economic power.
Outlook and Scenarios
If the government uses current pressures to deepen pro-market reforms, India could consolidate its role as a partial alternative to China in manufacturing and services; failure to do so risks perpetuating unfulfilled expectations.
Resorting to economic nationalism or anti-Western rhetoric as a political outlet would constitute a strategic error that would ultimately benefit Beijing.
8. Latent Tensions in Space: Alert Over Russian and Chinese Capabilities
Facts
European security sources have once again warned of expanding Russian and Chinese space warfare capabilities, including close-proximity maneuvers near Western satellites and potential interference and espionage activities.
Simultaneously, several governments have announced significant increases in space-defense spending, acknowledging that orbital communications and navigation infrastructure now constitute priority targets in any conflict.
Implications
The progressive militarization of space joins cyberspace as a core domain of hybrid warfare, where the boundary between peace and conflict is deliberately blurred.
For Europe, which lags behind in this area, the challenge is twofold: invest sufficiently to protect critical assets while avoiding uncritical alignment with the U.S. technological agenda.
Outlook and Scenarios
Efforts to establish regulatory frameworks or codes of conduct defining red lines in space are foreseeable, although Russia’s behavior in Ukraine warrants skepticism regarding compliance.
In the absence of binding norms, effective deterrence will depend on system redundancy, rapid replacement capacity, and close civil-military integration within the Western space industry.
9. Bolivia: Liberal-Conservative Political Shift Amid Severe Economic Stress
Facts
Rodrigo Paz has assumed the Bolivian presidency promising a model of “capitalism for all,” following two decades of social-communist and indigenist dominance, amid the country’s worst economic crisis in forty years.
The new administration pledges to stabilize inflation, restore relations with the United States, and preserve selected social programs, although economists question the compatibility of fiscal discipline with expansive spending.
Implications
Bolivia’s political shift represents a symbolic setback for the Latin American populist left, whose egalitarian rhetoric increasingly clashes with realities of corruption, inefficiency, and stagnation.
Paz’s performance will be closely monitored across a region torn between failed Chavista models and right-wing movements struggling to articulate inclusive reforms.
Outlook and Scenarios
If macroeconomic stabilization is achieved without abruptly dismantling social protections, Bolivia could become a test case for pragmatic liberalism combining market economics with social responsibility.
Failure, however, could reopen the door to radical populism, which Chavista-aligned narco-authoritarian actors would be quick to exploit.
10. Failed Pakistan–Afghanistan Talks and North Korean Threats
Facts
Peace talks between Pakistan and Afghanistan in Istanbul ended without agreement, with both sides accusing each other of responsibility for the collapse of negotiations aimed at easing border tensions and consolidating a fragile ceasefire.
Meanwhile, North Korea’s defense minister warned of “more offensive actions” following the arrival of a U.S. aircraft carrier in South Korea and the imposition of new U.S. sanctions, denouncing joint military exercises as preparations for aggression.
Implications
The failure to reach an agreement between Islamabad and Kabul perpetuates a zone of instability that fuels regional jihadist terrorism and increases the influence of actors such as China and Russia.
Pyongyang’s rhetoric underscores the continued volatility of the Korean Peninsula, where miscalculation could rapidly escalate into confrontation between nuclear-armed powers.
Outlook and Scenarios
Absent more coherent engagement from the United States and its allies—combining deterrence with credible diplomacy—the Afghan-Pakistani corridor will remain a sanctuary for terrorist groups and an arena of influence for Tehran and Beijing.
On the Korean Peninsula, the balance between firmness and restraint will remain precarious, with any missile test or naval incident reigniting debates over indigenous nuclear capabilities in Tokyo and Seoul.