Trump tones down rhetoric on Greenland at Davos, but can markets believe him?

Donald Trump took centre stage at the 2026 World Economic Forum meeting when he addressed world leaders, heads of state and global CEOs at the annual Davos meeting on Wednesday.

The US President said he 'won’t use force' to get Greenland, but that the country would be 'unstoppable' if he uses 'excessive strength and force' to acquire the Arctic island, which is controlled by Denmark.

RELATED: Why WEF Davos 2026 is going to be all about Donald Trump

Trump seemed to tone down the rhetoric on the issue, after previously suggesting the US would resort to any means to take over the island in the interests of world security.

A few days ago, he threatened eight European nations with additional tariffs of up to 25% until US control of the territory is achieved.

RELATED: Trump threatens European nations with tariffs over Greenland

Trump is known for making threats he sometimes doesn't carry out, hence the TACO acronym - Trump Always Chickens Out.

"Now imagine how we feel managing money having to watch everything he says all the time", quips Feroz Basa, head of Global Emerging Markets at Sanlam Investments.

He points to one 'guiding light' in this uncertain scenario, saying that when the stock market falls, Donald Trump reacts. "That's the kind of indicator we look at to see whether he's going to sway to one side or the other", Basa says.

"When the gold price is almost at $5,000 (an ounce), we never know what to take seriously with him, but as I've picked up over the years he comes out full force for example saying previously that he'll take Greenland by any means, and then you get the shock and the US market goes into negative territory... then he's at Davos today saying 'we won't use force' but need it strategically and it's close to North America so technically it's theirs."

Basa also highlights the positive figures that Trump cited at Davos to illustrate the strength of the US economy, which do not paint an accurate picture.

International relations analyst Donovan Williams warns about seeing Trump simply as 'crazy' and being pulled into the narrative some media are creating around fears that he has dementia.

While the US President may often be careless with words, like referring to Greenland as Iceland, one has to look past all this to analyse him correctly, says Williams.

We must remember that he is fleshing out their election campaign for the US midterms, William cautions, taking this into account when Trump points to economic growth of 5.4% growth and using money from tariffs to benefit Americans.

"The scenario we've got to start sketching in South Africa is that the Republicans could win the midterm November elections, and then what does that do for Trump and the power he has - how do you manage that? Right now in Davos what he's explained is that while people have been saying the economy is doing so badly, he's saying 'I'm going to change the Federal Reserve chair, I'm going to reduce interest rates, credit's going down... inflation is better than it's ever been... and he's essentially reminding Davos that the US doesn't need to put troops on the ground in Greenland as long as they cooperate and don't sell need goods to China or Russia..."

Scroll up to the audio player to listen to the full discussion