The long-term implications of Trump's Davos appearance

Usually a relatively quiet affair, this year’s World Economic Forum made headlines as President Donald Trump walked in with threatening language over wanting to acquire Greenland, and left with what he said was a framework deal that would avoid a new trade war with European allies.

The events at the forum, held annually in Davos, Switzerland, crystalized something else among allies — they no longer see the U.S. as a reliable partner and are looking elsewhere.

One of the defining moments of the forum was a speech by Canada’s Prime Minister Mark Carney.

“Great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited,” Carney said.

He went on to say the world is in the midst of a rupture of old alliances, and middle powers like Canada need to band together.

“He received a standing ovation, which really doesn’t happen,” said Kal Raustiala, director of UCLA’s Ronald W. Burkle Center for International Relations. “Davos is a very buttoned-down place.”

Raustiala said Carney’s comments echoed frustrations over a year of erratic policies from the Trump administration.

“Greenland was sort of the straw that broke the camel’s back, because it was more than just tariffs,” he said.

It was using economic power as a cudgel to demand territory from an ally, Raustiala said.

Liliana Rojas-Suarez, senior fellow at the Center for Global Development, said American economic power is waning. The U.S. dollar is still the world’s reserve currency, she said, but is showing signs of waning.

“Holdings of gold by central banks around the world are now larger than holdings of the U.S. dollar,” she said. “That is something that has not happened in many, many years.”

That’s a sign, Rojas-Suarez said, of the degradation of U.S. credibility that has already had ripple effects.

Ahead of Davos, Canada inked a trade deal with China that, in part, eased tariffs on Chinese electric vehicles — tariffs that had been imposed in partnership with the U.S.