Where’s the line

Recently: How are America’s allies responding to its threats? + How has China become so innovative while remaining so authoritarian? Jennifer Lind’s new book, Autocracy 2.0: How China’s Rise Reinvented Tyranny.

Today: What could stop Trump in the Arctic? On Wednesday, he meets European leaders at Davos—having confided that he no longer feels obligated to “think purely of peace.”

+ For members: Can Europe save its auto industry? Sander Tordoir on how Chinese competition, American tariffs, and self-inflicted injury have put Europe’s carmakers on the brink.

& New music from Sunniva Lindgård ...

Cliffhanger

U.S. President Donald Trump has threatened 10 percent tariffs on eight NATO allies—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—rising to 25 percent in June unless they agree to the “complete and total purchase of Greenland.” On Sunday, the Guardian published a letter Trump sent to Norway’s Prime Minister Jonas Gahr Støre explaining his position: Having been denied the Nobel Peace Prize last year, the president wrote, he no longer feels “an obligation to think purely of peace.”

After an emergency meeting on Sunday, the European Union is weighing €93 billion in retaliatory tariffs. The eight target countries issued a joint statement: “We will not allow ourselves to be blackmailed. … We will continue to stand united.” On Wednesday, Trump meets European leaders at Davos to discuss Greenland, while they all—not least Denmark’s—have rejected it as a topic of discussion. Assuming he doesn’t stop, what might stop him?

It’s true that Trump has backed down before, but so far, he isn’t backing down here—and insists he’s getting what he wants, “easy way or hard way.” Until it breaks, the pattern suggests escalation, not negotiation theater. Military action against a NATO ally seems almost unthinkable—but perhaps at this point not totally. The Europeans could blink—economic pain cuts both ways—but the unified front and the retaliation threat suggest otherwise. The U.S. Supreme Court is weighing whether Trump can use emergency powers for tariffs, though on an uncertain timeline. Congressional Republicans have stayed quiet. And Denmark still isn’t selling. 

The U.S. has never used force against a treaty ally. Fewer than one in five Americans support acquiring Greenland at all.

It’s also true that Trump has gotten away with doing unprecedented and unpopular things before—but this is uncharted territory even for him.

Meanwhile

• The constitutional standoff in Minneapolis. An American federal grand jury served subpoenas on Monday to Minnesota Governor Tim Walz, Minneapolis Mayor Jacob Frey, and state Attorney General Keith Ellison—all Democrats—demanding records related to their response to Immigration and Customs Enforcement operations. The U.S. Justice Department is also appealing a restraining order that bars federal agents from arresting protesters. Some 1,500 active-duty soldiers from the Army’s 11th Airborne Division remain on standby in Alaska for possible deployment; the Minnesota National Guard is also on alert.
• A billion-dollar seat at the table. The Kremlin confirmed on Monday that Trump has invited Russia’s President Vladimir Putin to join his “Board of Peace”—the body overseeing the reconstruction of Gaza. A US$1 billion contribution buys a permanent seat; otherwise, members serve three-year terms. Invitations have also gone to Belarus, Thailand, Slovenia, and the European Commission. Israel’s Finance Minister Bezalel Smotrich called the board “bad for Israel” and demanded its dissolution. France is holding off. How the board will function with dozens of invitees—including adversaries—remains unclear.
• Ceasefire, collapsed, renewed. The Syrian military announced a new four-day ceasefire with the Kurdish-led Syrian Democratic Forces on Tuesday—two days after a previous agreement fell apart. ISIS fighters escaped from a prison in al-Shaddadi; each side blames the other. The SDF has now abandoned al-Hol camp, which holds some 24,000 people linked to ISIS, citing “international indifference.” U.S. envoy Tom Barrack urged the Kurds to accept full integration: “The original purpose of the SDF as the primary anti-ISIS force on the ground has largely expired.”
• The battle over the dead. Iran’s Supreme Leader Ayatollah Ali Khamenei acknowledged on Saturday that “several thousands” of Iranians have been killed since protests erupted in late December—blaming actors linked to the United States and Israel. The Norway-based Iran Human Rights puts the toll at over 3,400 protesters killed by security forces, with more than 10,000 arrested. The regime has warned of mass executions; Trump has threatened military intervention if the crackdown continues. Internet restrictions remain in place across much of the country.
• China’s demographic freefall. The birthrate in the People’s Republic fell to a record low in 2025—5.63 per 1,000 people, down from 6.39 in 2023. The country recorded only 7.92 million births, a 17 percent plunge from the previous year and the lowest figure since 1949. The population declined by 3.39 million to 1.405 billion, the fourth consecutive annual drop. Cash subsidies, tax breaks, and extended maternity leave have failed to reverse the trend; demographers warn that births are now roughly where they were in 1738, when China’s population was 150 million.

For members

The specter of Detroit

Can Europe save its auto industry? Sander Tordoir on how Chinese competition, American tariffs, and self-inflicted injury have put Europe’s carmakers on the brink.

Michigan was once the heart of America’s car industry. Today, it has about 280,000 fewer automaking jobs than it had in the 1950s. Detroit, the heart of the industry, lost nearly two-thirds of its population—more than 1.2 million people—and became a byword for post-industrial American decline, one it’s only now, decades later, beginning to shake off. As European carmakers have entered a period of prolonged crisis, the specter of Detroit is haunting the Continent.

In December, Volkswagen stopped production at its Dresden plant—the first time in the company’s 88-year history that it has closed a production site in Germany. The closure caps a turbulent year: in December 2024, after strikes and marathon negotiations, VW reached a deal with unions to cut 35,000 German jobs by 2030 and slash production capacity by 734,000 vehicles. “It was,” the IG Metall union spokesman Steffen Schmidt told the BBC, “a very big shock.”

But Volkswagen isn’t alone. The number of cars produced in Germany fell from 5.65 million in 2017 to 4.1 million in 2023, according to the International Organization of Motor Vehicle Manufacturers. German carmakers just had their worst quarter since the 2009 financial crisis. And between 2024 and 2025, the German automotive industry saw employment fall by 6.3 percent—the biggest slump of any major sector in the country.

The automotive industry is the crown jewel of European manufacturing, employing more than 13 million Europeans directly or indirectly.

Why is it struggling?

Sander Tordoir is the chief economist at the Centre for European Reform. Tordoir says European carmakers face two massive challenges: increasing competition from China, which has provided enormously generous subsidies to its own carmakers while rigging the exchange rate in their favor; and U.S. tariffs on European cars. On top of that, German carmakers made a series of costly mistakes—confident in their technological lead in combustion engines, they neglected to invest in innovative battery technologies. Now they’re trying to catch up, but they’re way behind their Chinese competitors.

Fundamentally, Tordoir says, the car industry is being crushed between a Chinese hammer and an American anvil. Unless Europe supports its carmakers with enough funding for capital-heavy innovation while protecting them from Chinese market distortions, it’s hard to see how the industry can survive in its current form. The stakes are massive. Europe has lost some of its most innovative companies to the United States. It lags behind the U.S. in productivity growth. Which European sector has seen exceptionally high productivity gains? Manufacturing. But now, with the car industry in crisis, even that’s under threat …

New music

‘Someone’

Sunniva Lindgård, a Norwegian musician based in Oslo who records as Sassy 009, released her debut album Dreamer+ last week. It layers an interior stream of thought over broken-up breakbeats, vintage acid-house squiggles, and a fun synthpop pace.