Reeves: Keep cool heads over tariff threat
Rachel Reeves, the UK chancellor of the exchequer, is now speaking at a Bloomberg session just outside the WEF congress centre.
Asked about the tariff threats from the US, Reeves says that she would urge everyone to keep cool heads.
The chancellor cites the trade deal between the US and UK which has brought down tariffs (although Trump is threatening to put them up again, and that deal was actually frozen in December).
She also points to other trade deals either signed off or under negotiation, such as with India and South Korea.
Reeves tells her audience:
I believe in free and fair trade.
Insisting there are benefits for businesses and consumers from open economies, she adds:
I want Britain, even in a world where others are putting up barriers to investment, trade and talent, to be bring them down.
She then cites the visa shake-up announced overnight.
Key events
Finnish president predicts Greenland crisis will be defused soon
Finland’s president Alexander Stubb predicted that the Greenland crisis will likely be “defused” by the end of the week.
In an interview on Bloomberg Television here in Davos, Stubb said:
“The latest conversations that I’ve had about this subject in the past two to three hours — this is how fast things are changing in the new foreign-policy world — give me a little bit of hope that we’ll find a way.”
The BBC’s Faisal Islam has captured the essence of Mark Carney’s speech here:
PM Mark Carney implores the world’s middle powers to follow Canadas example:
“the old order is not coming back”… “nostalgia is not a strategy”…“There has been a rupture” in the world…”
replaced by “a system of intensifying great power rivalry with the most powerful pursue…
— Faisal Islam (@faisalislam) January 20, 2026
Carney: Trump’s Board of Peace needs some work
Q: Will Canada be joining Donald Trump’s Board of Peace?
Carney says, diplomatically, that work is needed on the structure of the vehicle.
In Canada’s view, he says, it could be better designed to address the immediate needs of Gaza, and needs to be coordinated with the full flow of aid into Gaza.
Delicately, he adds that there are elements of the governance process that could be improved.
Q: Will Canada be paying $1bn for permanent membership?
We would write cheques and deliver in kind to improve the lives of the people of Palestine, Carney replies, emphasising that Canada is committed to a two-state solution to the issue.
Q: Is there an offramp in the Greenland crisis?
There is a better outcome that can come from the discussions that have been catalysed, in an unusual way, Carney replies.
He adds that Canada is four-square committed to improving security of the Arctic, and working with Nato to achieve it.
Carney adds that Russia is, without question, a threat in the Arctic, saying:
They are a real threat in the Arctic, one we need to protect against.
They are more of a prospective threat than actual one, and we intend to keep it this way, he adds.
Carney: Canada strongly opposes tariffs over Greenland
Mark Carney then throws his country’s weight behind Denmark and Greenland over the row with Donald Trump.
He tells Davos that Canada stands firmly with Greenland and Denmark, adding that its commitment to NATO’s Article 5 (mutual protection) in “unwavering”
Carney adds that Canada strongly opposes tariffs threatened on European countries over Greenland, and calls for focused talks to address the issue.
Carney: We are entering the beginning of a ‘harsh reality’
Back in the WEF congress hall, Canadian prime minister Mark Carney is delivering the final special address of the (rather long) day.
Carney begins by telling his audience, in French, that it is “a pleasure and a duty to be with you at this pivotal moment” that Canada and the world are going through.
And then he drops the hammer, saying we are experiencing:
The end of a pleasant fiction and the beginning of a harsh reality.
Carney says that it seems that every day we are reminded that we live in a new era of world power rivalry.
He says it is reminiscent of the famous quote from ancient Greek historian Thucydides, that the strong do what they can, and the poor do what they must.
Faced with this logic, there is a temptation for countries to comply to buy safety, he says, but warns that it won’t work.
He cites an essay from Václav Havel, the Czech dissident, from 1978 called the power of the powerless, asking how did the communist system sustain itself.
That essay explained how a shopkeeper put up a sign declaring “Workers of the world, unite!”, even though he didn’t believe it.
Taking it down undermined the communist system,
To applause, Carney declares:
Friends it is time for companies and countries to take their signs down.
He then explain that, for decades, countries such as Canada prospered under the rules-based global order.
It allowed them to pursue values-based foreign policy under its protection.
But Carney says, we always knew that the story was partly false, confessing:
We participated in the rituals, and avoided calling out the difference between rhetoric and reality.
He then explains how crisis in finances, health, and geopolitics have led to a situation where great powers are using economic tools as weapons.
And, he warns, that the archicture of collective problem-solving, from the WTO, to the UN, to COP – is under threat.
Middle powers, he says, have the most to lose from a world of fortresses and the most to gain from co-operation.
We know that the old world order is not coming back, Carney insists.
But he also warns that the great powers would run risks by abandoning the old world order, saying one-time allies will be forced to diversify.
“Hegemons cannot continually monetise their relationships”.
You can watch Rachel Reeves, Howard Lutnick et al here:
Canadian finance minister François–Philippe Champagne also touches on trade tensions with the US, pointing out that the two countries share a continent, and been trading for a long time
We’ve built that integration. Within that, we need to build more resilience within the system, he explains, adding:
“What we’re facing now is a rupture point, where we need to change the future together.”
Rachel Reeves has hotfooted it from Bloomberg’s Davos area into the main congress centre, to appear on a panel here.
She’s alongside Canadian finance minister François-Philippe Champagne, US commerce secretary Howard Lutnick, Bank of America CEO Brian Moynihan, and EY CEO Janet Truncale.
Lutnick takes the first delivery from historian Adam Tooze, who is chairing the session, comparing Lutnick’s “ebullience” and “dynamism” with his admission that he is the “hammer”, as he’ll hit people with 100% tariffs if they don’t do what we want.
Q: How do you think people, such as the government of Denmark, react?
Lutnick takes a wider view, explaining that globalisation has failed the US – it left America behind, and left American workers behind.
He argues that the basis of the America First movement is that you should not be dependant on another country for anything that is important to your sovereignty (and if you are, they’d better be your best friends).
Taking a pop at Davos, Lutnick says he views WEF “not as a flagpole in the middle, but the flag”, that was buffeted by trends.
He says it’s a mistake that Europe committed to net-zero policies that rely on technology from China.
Lutnick explains:
America First is the job of our government, to take care of our workers.
That policy is something other countries should consider too – to take care of their own.
And he insists “When America shines, the world is brighter.”
Q: What about Greenland?
Lutnick says the Western Hemisphere is vital to the US, and its national security people are on the case.
He says:
Western Hemisphere is vital to the USA…. and the United States of America really really matters to the world.
Reeves agrees that the world would be poorer and scarier without the US.
But in a defence of the Special Relationship, she says that the UK is probably the US’s closest allies.
Perhaps pricked by this, Lutnick replies “We love you, we do”.
The feeling is mutual, Reeves replies, before pointing out that the US is currently rather dependent on China for its rare earth minerals.
The most important thing, Reeves tells Bloomberg’s session here at Davos, is to improve trading relations with the UK’s nearest neighbours – namely Europe.
The chancellor says this was damaged after the vote to leave the EU almost a decade ago, adding “we are now fixing that mess”.
Q: So could the UK rejoin the customs union, as some MPs want?
No, that’s not on the cards, Reeves replies, saying Labour were very clear on this in their last manifesto.
She points out that the government has brought back the Erasmus scheme, making it easier for UK students to study in Europe (great news for young people, but it won’t fix trade friction at the border, alas).
Rachel Reeves is then asked if Donald Trump’s recent attacks on the US Federal Reserve could hurt the UK.
She replies that people understand that the UK, with her as chancellor, have huge respect for independent institutions, both central banks the UK’s Office for Budget Responsibility.
Previous governments undermined those institutions, she says (a reminder that Liz Truss sidelined the OBR before her disastrous mini-budget of 2022).
Asked about Labour’s chances the next election, Reeves points out that Labour won “a massive majority” 18 months ago.
She insists she’s confident that people will see benefits as the goverment’s plan to grow the economy, bring in investment, pays off and inflation returns to target.
Reeves: Keep cool heads over tariff threat
Rachel Reeves, the UK chancellor of the exchequer, is now speaking at a Bloomberg session just outside the WEF congress centre.
Asked about the tariff threats from the US, Reeves says that she would urge everyone to keep cool heads.
The chancellor cites the trade deal between the US and UK which has brought down tariffs (although Trump is threatening to put them up again, and that deal was actually frozen in December).
She also points to other trade deals either signed off or under negotiation, such as with India and South Korea.
Reeves tells her audience:
I believe in free and fair trade.
Insisting there are benefits for businesses and consumers from open economies, she adds:
I want Britain, even in a world where others are putting up barriers to investment, trade and talent, to be bring them down.
She then cites the visa shake-up announced overnight.
Just the threat of new tariffs over the Greenland crisis is distorting global supply chains, according to Andrei Danescu, CEO of UK-based warehouse logistics firm Dexory.
Danescu explains:
US-bound imports are slowing as companies pause orders, stockpile critical components and rush deliveries, triggering customs delay and warehouses filling with the wrong stock, in the wrong place, at the wrong time.
“This is the commercial reality behind renewed tariff threats against the UK and EU and the broader use of economic and territorial pressure. The message to business is clear: geopolitics now overrides efficiency.
“For UK manufacturers and retailers, especially in automotive and consumer goods, the impact is immediate. Predictable delivery rhythms will break, forcing many to over-order or risk stoppages. ‘Just in time’ becomes ‘just in case’, tying up cash and warehouse space.
“The lesson is simple: tariffs destabilise supply chains and, in an economy already running hot, uncertainty is its own tax. All organisations can do now is prioritise warehouse visibility to inform decision making.”
Jennifer Jacobs of CBS News has spotted that California governor Gavin Newsom slipped into Scott Bessent’s event….
Dem likely presidential candidate @GavinNewsom slid into a last-minute open seat in Trump Treasury Secretary Scott Bessent’s remarks at Davos — and happened to be seated right next to @SecScottBessent‘s staff. Newsom took notes and silently scoffed at some of Bessent’s comments,… pic.twitter.com/ZPp4WqeSHJ
— Jennifer Jacobs (@JenniferJJacobs) January 20, 2026
I couldn’t quite see who Emmanuel Macron was greeting at the start of his speech – the answer is King Philippe-Filip and Queen Mathilde of Belgium….
…plus Serbia’s president Aleksandar Vucic, and European Central Bank president Christine Lagarde.
Bessent predicts: ‘very substantial tax refunds’ for US workers
No sooner had Emmanuel Macron concluded his speech than treasury secretary Scott Bessent popped up in a session to discuss the US economy.
You can watch it here:
Blowing the trumpet for Donald Trump’s economic agenda (as he did this morning), Bessent said the US president’s tax deals, trade deals, and deregulation are all helping – deregulation, the most powerful part, just starting to kick in, he says.
Bessent also predict that “very substantial tax refunds” are coming to working Americans in the first quarter of the year.
[This, I think is due to the retroactive effects of the July 2025 “One Big Beautiful Bill Act,” which included tax cuts for overtime, tips, and Social Security. US workers who didn’t adjust their withholdings (the amount employers deduct from paychecks for federal income), will qualify for a refund].
This could run up to $1,000 per wage earner, Bessent says.
