US Treasury Secretary Revives Trade-War Inflation Risk at Davos as Crypto Sinks
Global markets turned risk-off on Tuesday after US Treasury Secretary Scott Bessent openly reaffirmed the Trump administration’s willingness to use tariffs as a primary geopolitical weapon. His statements reignited fears of trade-driven inflation just as crypto markets were showing signs of stabilization.
Bitcoin fell back below $90,000, while Ethereum slipped under $3,000, as investors reassessed macro risks following Bessent’s remarks at the World Economic Forum in Davos.
Crypto Market Slides Again Over President Trump’s EU Tariffs. Source: CoinGecko
Tariffs Framed as Leverage, Not a Last Resort
Speaking at Davos, Bessent made clear that tariffs remain central to US foreign-policy strategy. He described them as an effective tool rather than a temporary measure.
“Sit back, take a deep breath, do not retaliate. The president will be here tomorrow and he will get his message across,” Bessent said, responding to European backlash over tariff threats tied to Greenland.
The language signaled that the White House expects resistance from allies and is prepared to escalate if necessary. Markets interpreted this as confirmation that trade friction risks are rising again, particularly between the US and Europe.
Bessent also revealed a concrete timeline, noting that President Trump could impose a 10% tariff as early as February 1 if Denmark and allied countries refuse to cooperate on Greenland.
At Davos today, U.S. Treasury Secretary Scott Bessent warned it would be “very unwise” for Europe to retaliate over U.S. ambitions to take Greenland.
He added that European leaders should take President Trump at his word, arguing the U.S. needs Greenland for strategic leverage… pic.twitter.com/3SwvUadzMl
Beyond geopolitics, Bessent defended tariffs as economically effective and dismissed concerns that they would backfire domestically.
“It’s very unlikely that the Supreme Court is going to strike down a president’s signature economic policy,” he said, adding that tariffs have already generated “hundreds of millions of dollars” in revenue.
However, this stance clashes with recent research showing that US consumers absorb the vast majority of tariff costs.
New data from European and US economists indicates that tariffs act more like a hidden consumption tax, tightening household liquidity over time.
That dynamic matters for crypto. Reduced discretionary spending and higher price pressures directly weaken speculative capital flows, particularly into high-volatility assets.
What is President Trump’s Greenland ambition really about?