Authored by Kevin Stocklin via The Epoch Times,

President Donald Trump has encouraged American oil companies to reinvest $100 billion in Venezuela to spur energy production and to rescue Venezuelans from desperate poverty.

Oil companies, however, are taking stock of the decrepit state of Venezuela’s energy infrastructure after decades of communism, and seeing a number of critical impediments.

“We’re going to have our very large United States oil companies—the biggest anywhere in the world—go in, spend billions of dollars, fix the badly broken infrastructure,” Trump stated in a Jan. 11 press conference following a meeting with top oil executives.

Venezuela has the world’s largest known oil reserves, estimated by rating agency S&P at 300 billion barrels, which are located in a region along the Orinoco River called the Orinoco Belt. At its peak—and with investment and expertise from oil majors including Exxon Mobil, ConocoPhillips, Chevron, BP, Total, and Norway’s Statoil—Venezuela produced more than 3 million barrels per day and was America’s largest foreign supplier.

America’s gulf coast refineries were built to process the heavy sour crude from Venezuela, and they can refine it much more efficiently than the light crude produced from fracking. But trade with Venezuela slowed to a trickle after then-president Hugo Chavez seized the assets of western oil companies in 2007, leading to the imposition of U.S. sanctions. Since Venezuela’s wells and other equipment were nationalized, output collapsed by about 70 percent and is currently less than 1 million barrels per day, according to statistics website Worldometer.

Venezuela thus presents a massive opportunity for Western oil companies to rebuild what had once been a top global oil producer. But daunting problems remain.

“Commercially, the upside is long-life reserves, portfolio diversification, and service and infrastructure opportunities if the country becomes investable again,” Jason Isaac, CEO of the American Energy Institute, told The Epoch Times.

“But the investment case only works if companies can actually control operations, get paid, and move barrels transparently—otherwise the ‘gain’ is trapped capital and political risk.”

Venezuela Currently ‘Uninvestable’

On Jan. 9, Exxon Mobil CEO Darren Woods expressed little enthusiasm for an immediate return to Venezuela, stating in a meeting hosted by Trump at the White House that the country, in its current state, is “uninvestable.”

“We’ve had our assets seized there twice,” Woods said. “And so, you can imagine to re-enter a third time would require some pretty significant changes from what we’ve historically seen here and what is currently the state.”

In an aerial view, the Exxon Mobil Baytown Refinery is seen in Baytown, Texas, on Jan. 13, 2026. President Donald Trump has threatened to sideline Exxon Mobil from Venezuela’s energy market after expressing that he “didn’t like Exxon’s response,” while making a push for oil companies to begin investing there. Exxon remains interested and is prepared to send a team to assess the existing oil infrastructure. Brandon Bell/Getty Images

Patrick Pouyanne, CEO of Total, likewise said that he would consider investing in Venezuela again at some point, but it is “not high on my agenda.”

Venezuela first expropriated the assets of western oil companies in the 1970s and again in 2007. By contrast to many governments in the Middle East and Africa that had done the same, Venezuela refused to compensate oil companies for their losses, leading the companies to sue and win in U.S. and international courts, claiming damages of around $60 billion.

Oil companies will likely want these claims to be paid before putting new money into Venezuela, but the country has little means to do so. Oil production has dwindled to less than 1 million barrels per day and, even at that level, still comprise about two-thirds of the government’s entire budget. China has replaced the United States as the top importer of Venezuelan oil, currently buying an estimated 80 percent of it, but at a discount.

And while Venezuela faces tens of billions of dollars in claims from western oil companies, it is now indebted to China as well. According to the U.S.-China Economic and Security Review Commission, Chinese banks have at least $10 billion in outstanding loans to Venezuela.

Venezuelan Crude Expensive to Extract

Beyond these factors, there are also technical problems. Venezuela’s oil reserves, though abundant, are a particularly dense and sulfur-rich form of crude oil that requires a level of investment and expertise to extract and process that only the world’s largest companies can provide, experts say.

“Venezuela has very large reserves, but when we’re talking about the actual production of them, they’re very difficult to produce and very expensive to produce,” Kenny Stein, a policy expert at the Institute for Energy Research, told The Epoch Times.

Another issue for America’s oil companies is that the full extent of the damage to Venezuela’s infrastructure has yet to be assessed, and the cost of rebuilding it could go well beyond the $100 billion figure that has been estimated.

“The total investment required is not immediately clear, given the lack of transparency under the Chavez and Maduro regimes, but it is likely to be substantial and exceed initial estimates,” Ryan Yonk, senior fellow at the American Institute for Economic Research, told The Epoch Times. “Rebuilding the oil infrastructure is likely to be a long-term project spanning multiple years and potentially decades, rather than the short-term expectations some hold for rapid development and immediate effect.”

Experts say that equipment located in Venezuela has not only been neglected but pilfered as well.

“The infrastructure, the wells, the pipelines, the entire oil industry in Venezuela has been really stripped down to the bone and is barely functional,” Stein said. In addition to theft by government officials, he said, “employees of the state oil company have been stealing copper from their facilities to sell to feed their families.”

Oil companies will likely want government co-investment in some form to help pay for the reconstruction, Yonk said.

Another issue when deciding whether to invest in Venezuela is that Western oil companies must weigh it against the alternatives.

“They could go to Brazil or Guyana, or places in the United States, that are all less expensive to produce,” Stein said. “There would be faster production, they’re not as volatile, and you’re not as much at risk of losing everything.”

Aerial view of an oil well in eastern Monagas, in Maturin, Venezuela, on Feb. 13, 1998. Bertrand Parres/AFP via Getty Images

What It Will Take

For all these reasons, it will take significant changes for Venezuela to attract capital again, experts say.

“U.S. companies will not commit serious capital to Venezuela without a credible reset on rule of law,” Isaac said. “That means binding contract protections, enforceable dispute resolution, and a settlement framework for legacy expropriation and unpaid joint-venture debts.”

Oil companies will likely seek guarantees from the U.S. government that oil sanctions will not be reimposed, that whatever agreements they enter into will be honored, and that they can operate safely and repatriate whatever profits they may earn, he said.

“Without those conditions, any U.S. presence will stay limited to short-cycle, low-exposure activity,” Isaac said.

Exxon Mobil’s CEO stated that he is willing to take initial steps to help with Venezuela’s reconstruction “while these longer‑term issues are being worked.”

“We haven’t been in the country for almost 20 years,” Woods stated. “We think it’s absolutely critical in the short term that we get a technical team in place to assess the current state of the industry and the assets to understand what would be involved to help the people of Venezuela get production back on the market.”

If Exxon is invited by the Venezuelan regime and has security guarantees from the Trump administration, Woods said he is “ready to put a team on the ground.”

Chevron is the only U.S. oil major currently operating Venezuela, producing about 240,000 barrels per day in a joint venture with PDVSA, the country’s state-owned oil monopoly, though experts say much of that effort is simply to preserve the assets they already have in the Orinoco Belt.

“Chevron’s has continued to operate there, but basically doing the bare minimum to keep their wells from being ‘bricked,’” Stein said. “Because of the thickness and tar-like state of the oil, if you don’t keep it continually maintained and flowing at a minimum level, the well will be destroyed.”

Nonetheless, Chevron’s vice chairman Mark Nelson told Trump on Jan. 9 that he believed they could double their output in Venezuela immediately.

An incremental increase in Venezuela’s oil production is more likely than a rapid return to pre-Chavez levels, Isaac said, predicting that the country could reach approximately 1.3 million barrels per day within a couple years, and perhaps 2 million barrels per day within a decade.

President Donald Trump speaks during a meeting with US oil companies executives in the East Room of the White House in Washington, DC, on Jan. 9, 2026. Saul Loeb/AFP via Getty Images

Strategic and Economic Goals

Despite the hesitancy of oil majors to commit significant capital to Venezuela at this point, the Trump administration has stated its strategic interest in preventing China and other U.S. adversaries from stepping into the void.

During an interview with NBC’s Meet the Press, Secretary of State Marco Rubio said that Venezuela had become “a crossroads for the activities of all of our adversaries around the world.”

For Venezuelans, however, the riches of oil have been both a blessing and a curse.

Calling Venezuela “a case study in the perils of becoming a petrostate,” a 2018 study by the Council on Foreign Relations stated that “since it was discovered in the country in the 1920s, oil has taken Venezuela on an exhilarating but dangerous boom-and-bust ride that offers lessons for other resource-rich states.”

In what has been called “Dutch disease,” developing countries that suddenly get rich from the discovery of natural resources develop a singular dependence on those resources, leaving other sectors of the economy to languish while government corruption and theft proliferate, with little of the wealth ultimately going to benefit the citizens at large.

For this reason, some analysts say that the best solution for Venezuela is to establish a system of free markets, democratic traditions, stability, and the rule of law, similar to what Poland and Chile have done since emerging from authoritarian regimes. Key elements of Poland’s reforms included a legal system that protected property rights, political stability under a democratic system, privatization of state-owned companies, a stable currency, and a tax regime that allowed investors to earn a decent return.

“Under the ‘warm embrace of communism,’ [Poland] was an economic basket case,” the Committee to Unleash Prosperity, a nonprofit founded by free-market economists Arthur Laffer and Steve Moore, stated in an op-ed.

Having embraced democracy and free markets, Poland recently achieved GDP growth rates of about 4 percent per year, and is predicted to overtake the UK in GDP-per-capita by the end of this decade, they said.

President Trump will sit down for an interview with CNBC’s Joe Kernen in Davos, Switzerland on Wednesday.

Earlier, Trump gave a speech at the World Economic Forum where he touted the strength of the U.S. economy and criticized Europe, saying it “is not heading in the right direction.”

Trump also doubled down on his desire to take control of mineral-rich Greenland, but said he wouldn’t use force to achieve this goal.

“People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force,” Trump said in the highly anticipated address to the WEF.

The question is – will Trump refocus his attention on domestic matters – affordability – or keep going on the earlier more interventionist speech.

This will also be the first opportunity for President Trump to respond to the EU’s decision to freeze the trade deal with the US… and unleash their ACI.

Watch live (due to start at 1300ET delayed start to 1400ET):

Among the big and more notable quotes to come out of President Trump’s Davos address is his statement that he “won’t use force” to take over Greenland while calling for “immediate negotiations” to discuss the “acquisition” of the Arctic territory by the United States from Denmark.

“This enormous unsecured island is actually part of North America,” Trump said before the World Economic Forum. Still, he asserted “That’s our territory.” He added: “The fact is, no nation or group of nations is in any position to be able to secure Greenland other than the United States. We’re a great power, much greater than people even understand. I think they found that out two weeks ago in Venezuela.”

Denmark has greeted the part of Trump’s remarks wherein he said he won’t use military force as “positive”. Leading European powers are still trying their best to flex their might, however.

As French President Emmanuel Macron addressed the summit, donning his aviator shades, he called on NATO allies to conduct a military exercise in Greenland amid Trump’s bellicose rhetoric related to potentially seizing the Danish territory..

“France calls for a NATO exercise in Greenland and is ready to contribute to it,” Macron’s office confirmed Wednesday just ahead of Trump’s arrival and speech in Switzerland. 

It remains unclear whether Macron also has US military participation in mind, or whether this would be a purely European NATO thing. Since near the beginning of Trump’s recently ramping up his rhetoric over Greenland, shortly on the heels of the Venezuela operation to overthrow Maduro, the Europeans have pursued an alternative strategy to divert Trump into assisting with joint Arctic monitoring. 

He’s complained of inroads in the resource-rich region by Russian and China, and so Europe is seeking to satisfy Trump’s call for Greenland to be a secure American outpost. EU leaders then hope he would eventually give up the idea of owning Greenland.

But Washington is seeing through this, with top US officials quickly pushing back against the idea of NATO drills there. Speaking on the sidelines of the WEF, US Treasury Secretary Scott Bessent took a swipe at Macron:

He described as “inflammatory” statements on Tuesday by the French president, Emmanuel Macron, who said Europe preferred “respect to bullies” and “the rule of law to brutality”, and Ursula von der Leyen, president of the European Commission, who promised an “unflinching” tariff response.

“If this is all President Macron has to do when the French budget is in shambles, I would suggest he focuses on other things for the French people,” Bessent said. He urged leaders in Davos not to show “reflexive anger” and “bitterness”.

Already France along with a handful of other EU nations has dispatched a small military contingent to Greenland and has plans to send more sea, air and land forces. Even Canada is said to be mulling some kind of troop deployment.

The bus “Greenland Excursions” taking the handful of European troops we sent for Arctic Endurance NATO drill is somewhat emblematic of the whole situation. pic.twitter.com/rsOQ398ua8

— Zeitgeist Explorer⚡ (@ZeitgeistExplo1) January 15, 2026

As for the NATO secretary-general, the alliance’s chief Mark Rutte kicked off the week by telling reporters that he does “not at all” see NATO as in crisis, brushing off much of the escalating Greenland back-and-forth.

“I think we are really working in the right direction,” Rutte said – but we can imagine Putin and Kremlin officials are currently kicking back to enjoy the popcorn and the show, also as the Ukraine war has momentarily taken a back seat among Western officials.

EU Commission President Ursula von der Leyen warned Wednesday before the European Parliament that the 27-member EU must accelerate efforts to strengthen both its economy and its defenses, as it confronts a shifting global order shaped by what she called “raw power.”

She took the opportunity to caution Washington and President Trump over his Greenland ambitions, saying that tensions between supposed “allies” over Greenland risk strengthening the West’s geopolitical rivals. Indeed, over in Davos, the Greenland question and US rhetoric has completely overshadowed efforts at furthering the Ukraine peace deal. But sadly truce efforts have in reality been going nowhere anyway.

“The shift in the international order is not only seismic, but it is permanent,” she told lawmakers, presenting as a pressing example the “volatile situation” surrounding Greenland, Russia’s ongoing attacks on Ukraine which is plunging it into darkness, as well as rising tensions in the Indo-Pacific.

“We will need a departure from Europe’s traditional caution,” said the European Commission president. “We now live in a world defined by raw power – whether economic or military, technological or geopolitical. And while many of us may not like it, we must deal with the world as it is now.”

Von der Leyen also called out President Trump’s recent threat to impose tariffs on European allies as “simply wrong”.

“If we are now plunging into a dangerous downward spiral between allies, this would only embolden the very adversaries we are both so committed to keeping out of the strategic landscape,” she said. “We are at a crossroads” – but it remains that “Europe prefers dialogue and solutions – but we are fully prepared to act, if necessary, with unity, urgency and determination,” she said.

While she and other EU elites are prattling on about this dubious concept called the ‘ruled-based order’ it must be remembered she and most of Europe were completely silent – and even seemed to give tacit approval for – the US invasion of Venezuela and overthrow of Nicolás Maduro.

According to one European-perspective report filed withing days after Maduro’s ouster:

The EU watches from the sidelines as the crisis in Venezuela unfolds, following the U.S. military operation that captured the self-proclaimed president, not recognised by most world governments, Nicolas Maduro, and his wife, Cilia Flores. A blitz that reportedly claimed at least 80 victims in Caracas, including civilians and military personnel. The EU High Representative for Foreign Affairs, Kaja Kallas, called for “calm and restraint by all actors,” and reminded Washington that, as a member of the UN Security Council, it “has a particular responsibility” to uphold the principles of international law. 

The statement released by Kallas has the backing of 26 member states – Hungary opted out – and it is the first coordinated reaction of the EU bloc, almost 48 hours after the unprecedented attack ordered by Donald Trump against the Venezuelan leadership. Brussels has avoided an explicit condemnation of the US military incursion – only Spanish Prime Minister Pedro Sanchez has openly accused Washington of violating international law – and has preferred to emphasise the illegitimacy of Maduro, who has been in power in Caracas for over a decade and is responsible for a ferocious repression against the democratic opposition in the country. A risky balancing act, which once again exposes the EU to accusations of double standards.

This spectacle of von der Leyen now dramatically warning about how this menace of “raw power” is upending the international community and ‘global order’ is clearly absurd and hypocritical on its face, and is obviously empty of any real content other than the usual performative moral posturing for the consumption of her fellow EU elites.

Independent journalist Ben Norton agrees that “There is no end to the imperial hypocrisy of the European Union.”

Territorial integrity and sovereignty are fundamental principles of international law.

They are essential for Europe and for the international community as a whole.

We have consistently underlined our shared transatlantic interest in peace and security in the Arctic, including…

— Ursula von der Leyen (@vonderleyen) January 17, 2026

“They never abandoned colonialism; they just became junior partners in crime to the US empire,” he adds, and continues: “Warmongering EU chief von der Leyen refuses to utter a word about Trump bombing Venezuela, kidnapping its president, and announcing an open-ended US colonial occupation to ‘run’ the country (and pillage its oil).”

“The craziest part of all is von der Leyen cynically pretends to care about international law and the UN Charter, which her masters in Washington just tore up and spat on,” Norton concludes.

US Treasury Secretary Scott Bessent, speaking at the World Economic Forum earlier today, said Deutsche Bank AG CEO Christian Sewing called him to disavow an analyst report from the bank that warned European investors could sell US assets amid the latest President Donald Trump-EU dispute over Greenland.

“We saw a six standard deviation move in Japanese bonds, which has spilled over to other markets, and I’ve been in touch with my Japanese economic colleagues, and I’m assured that they will take measures to stabilize that market and just so everyone knows that this notion that Europeans would be selling US assets came from a single analyst at Deutsche Bank. Of course, the fake news media led by the Financial Times amplified it, and the CEO of Deutsche Bank called to say that Deutsche Bank does not stand by that analyst report,” Bessent told reporters at Davos.

The research note in question comes from DB’s chief forex strategist, George Saravelos, who told clients on Sunday that Europe held approximately $8 trillion of US equities and bonds, making it America’s largest creditor and underlining Washington’s reliance on foreign capital to finance deficits.

“We spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America’s largest lender,” Saravelos wrote.

Saravelos did not predict a sell-off but warned that rising geopolitical tensions could force some European investors to rebalance away from the dollar, citing past repatriation by the Danish pension fund.

Headline yesterday…

*DANISH PENSION FUND AKADEMIKERPENSION TO EXIT US TREASURIES

— zerohedge (@zerohedge) January 20, 2026

“In an environment where the geoeconomic stability of the Western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part . . . With [US dollar] exposure still very elevated across Europe, developments over the last few days have the potential to further encourage dollar rebalancing,” he said.

We cited Bloomberg macro strategist Simon White, who noted earlier: “Any potential threat by Europe to sell its Treasuries in retaliation for President Donald Trump’s aim to annex Greenland is likely to be empty.”

Read White’s note here.

While president Trump took military force over Greenland off the table (for now at least) during his Davos speech, this makes a bruising  diplomatic showdown virtually assured. And ahead of whatever trade escalation the Trump admin may announce next, EU leaders toughened their position and want the European Commission to ready its most powerful trade weapon against the US if Donald Trump doesn’t walk back his Greenland threats.

According to Politico, which cites five diplomats with knowledge of the situation,  Germany joined France in saying it will ask the Commission to explore unleashing the Anti-Coercion Instrument (ACI) at the emergency EU leaders’ summit in Brussels on Thursday evening. Berlin’s move brings the EU closer to a more forceful response, with Trump’s escalating rhetoric about the Danish territory and its supporters having prompted key capitals to harden their stance on how Europe should react.

“The resolve has been there for a few days,” one of the diplomats said. “We have felt it in our bilateral talks … there is very broad support that the EU must prepare for all scenarios, and that also includes that all instruments are on the table.”

Politico also writes that what governments request of the Commission meeting on Thursday would be decided largely by what the U.S. president says in his Davos address on Wednesday; and as reported earlier Trump maintained maximum pressure to force Europe to yield control of the territory to the US. Trump’s speech came as several European leaders had been trying to arrange meetings with the president on the Davos sidelines to talk him down from imposing the tariffs. 

Aside from the anti-coercion tool, or “trade bazooka,” leaders have also discussed using an earlier retaliation package that would impose tariffs on €93 billion worth of U.S. exports. Two of the EU diplomats indicated that it is possible to impose the tariffs first, while the Commission goes through the more cumbersome process of launching the powerful trade weapon.

So what exactly is the ACI?

Europe’s “trade bazooka” has a 10-point list of possible measures on goods and services. They include:

• Curbs on imports or exports of goods such as through quotas or licenses.

• Restrictions to public tenders in the bloc, worth some 2 trillion euros ($2.3 trillion) per year. Here the EU has two options: Bids, such as for construction or defence procurement, could be excluded if U.S. goods or services make up more than 50% of the potential contract. Alternatively, a penalty score adjustment could be attached to U.S. bids.

• Measures impacting services in which the US has a trade surplus with the EU, including from digital service providers Amazon, Microsoft, Netflix or Uber.

• Curbs on foreign direct investment from the United States, which is the world’s biggest investor in the EU.

• Restrictions on protection of intellectual property rights, on access to financial services markets and on the ability to sell chemicals or food in the EU.

The EU is supposed to select measures that are likely to be most effective to stop the coercive behavior of a third country and potentially to repair injury.

What does the ACI allow?

The ACI offers a broad and flexible array of countermeasures: its aim is not merely to reciprocate, but to provide the EU with calibrated responses depending on the nature and impact of the coercion:

• Trade measures are the first type of possible responses. These could consist of the imposition or increase of customs duties, import/export quotas or licenses and limitations on the free movement of certain products.
• Services and non-tariff measures can also be introduced. The instrument also provides responses in the services sector, for example restrictions on the provision of cross-border services, limitation of access to certain service markets, changes in access criteria or licensing for third-country providers.
• Controls on FDIs and public procurement are probably the most powerful aspects of the ACI. They allow the EU to impose restrictions on access to EU public procurement markets for entities of a coercive third country; they may limit foreign direct investment (FDI), particularly in sensitive sectors, or impose conditions on investors from third countries in strategic areas.
• The ACI also allows action on intellectual property rights, financial market access or certain export controls & licensing, reflecting the need to cover broader economic areas where coercion may manifest. That said, the ACI does not allow everything. In particular, restrictions must be targeted at specific entities of the coercive country and proportionate to the harm caused. Broad investment bans in the third country would exceed this framework. In addition, measures must comply with WTO rules and relevant bilateral investment treaties; broad restrictions on a major partner like the US could raise serious legal challenges. 

Specifically, the ACI could allow the EU to impose tariffs on services imports from the US. For reference, a flat 10% tariff on all EU imports of US services could mechanically raise about EUR 50bn in revenues.

That said, the US firms selling services into the EU have substantial market power, especially in digital services. This implies that European consumers would find it difficult to substitute away from services imports from the US and would likely need to shoulder a significant share of the services tariff. However, the ACI would also allow the EU to take broader retaliatory steps against US services companies, including an increase in the digital services tax (DST), investment restrictions or “buy Europe” clauses in procurement (such as defence).

Original purpose of the Anti-Coercion Instrument

According to Credit Agricole (full note available to pro subs), the EU’s decision to introduce the Anti-Coercion Instrument (ACI) arose from a combination of geopolitical developments, trade conflicts and the perceived limitations of existing mechanisms.

In recent years, several third countries have increasingly used economic measures as leverage to influence EU or Member State policies. Notable precedents include China’s economic measures against Lithuania following its recognition of Taiwan’s representation, as well as repeated instances where countries applied unilateral tariffs, trade restrictions or investment barriers to press political demands. These cases highlighted that traditional WTO dispute settlement procedures were insufficient, since they typically address breaches of trade rules rather than coercive political pressure.

Against this backdrop, the European Commission proposed the ACI at the end of 2021. After a long EU legislative process, it was finally adopted by the European Parliament in plenary on 3 October 2023. The regulation was subsequently signed and entered into force on 27 December 2023

What it is, legally speaking?

The ACI falls within the broader scope of EU trade law. It is a directly applicable regulation (not a directive), meaning it bindingly applies uniformly in all Member States, without need to be devised in national law. 

Its structure combines a clear procedural framework with an indicative list of possible countermeasures, while strictly regulating their use to ensure compliance with international law. 

It defines economic coercion as a situation “where a third country seeks to exert pressure on the European Union or a Member State to influence a strategic choice or political decision by applying or threatening to apply measures affecting trade or investment”. This definition encompasses a wide range of practices, from punitive tariffs to restrictions on market access, services or investments. 

The instrument applies regardless of the identity of the third country and whether the coercion is formal or informal, allowing the EU to respond to behaviours that might not be illegal under WTO rules but are used as political leverage. 

How does the EU invoke the ACI

The ACI was proposed in 2021 as a response to criticism within the bloc that the first Trump administration and China had used trade as a political tool.  European law gives the European Commission up to four months to examine possible cases of coercion. If it finds a foreign country’s measures constitute coercion, it puts this to EU members, which have another eight to 10 weeks to confirm the finding.

Confirmation requires a qualified majority of EU members, the support of 55% of member states representing at least 65% of the EU population, within 10 weeks. This is a higher hurdle to clear than that for applying retaliatory tariffs.

The Commission would normally then negotiate with the foreign country in a bid to stop the coercion. If that fails, it can implement ACI measures, again subject to a vote by EU members. These should enter into force within three months.

Since the ACI is European, the whole process takes an eternity to implement, and could take anywhere from a few months to a year to complete. By then, whatever plans Trump has vis-a-vis Greenland would be largely consummated. 

According to Goldman, the EU will activate the ACI if the US escalates tensions further, but without implementing any measures immediately to leave additional time for negotiation. In other words, it is unlikely that any actual implementation of the ACI will take place in 2026 even assuming full-blown trade war returns.

More in the Credit Agricole and Goldman notes explaining the EU’s Retaliation Options available to pro subs.

Update (1238ET): The Supreme Court on Wednesday appeared ready to reject President Trump’s request to fire Fed member Lisa Cook as litigation over the issue proceeds in lower courts.

The case, Trump v. Cook, stems from the president’s attempt to halt a lower court ruling reinstating Cook after he fired her last year over alleged mortgage fraud. 

During oral arguments, multiple justices seemed skeptical of US Solicitor General D. John Sauer’s arguments about the limits of judges’ abilities to interfere with the president’s power to fire Cook – with some raising questions about whether granting Trump’s request would impact the public. 

Trump appointee Justice Brett Kavanaugh was among the skeptics, saying that Trump’s position would “weaken if not shatter the independence of the Federal Reserve,” while Amy Coney Barrett asked whether the risk to financial markets warranted “caution on our part,” though she also suggested she wasn’t ready to fully embrace Cook’s position.

*  *  * 

The Supreme Court on Wednesday is expected to review the legality of President Donald Trump’s firing of Fed Governor Lisa Cook last August over allegations of mortgage fraud.

In a letter to Cook, Trump cited a provision of the Federal Reserve act of 1913 which allows a president to fire members “for cause.” 

Cook challenged the firing, and after a lower court reinstated her, Trump asked the Supreme Court to intervene. During today’s oral arguments, the justices are expected to probe several legal issues – including whether the mortgage allegations constitute the sort of cause that allows firings under the Federal Reserve Act. 

Of note, Federal Reserve Chair Jerome Powell is planning to attend – which US Treasury Secretary Scott Bessent on Tuesday said would be a mistake. 

Powell’s plan to ​attend the court’s oral arguments is a potent symbol of the administration’s ongoing clash with the Fed following U.S. Department of Justice threats to pursue a criminal investigation of him. Powell called the threat a “pretext” to pressure ‍him over monetary policy. –Reuters

“I actually think that’s a mistake,” Bessent told CNBC. “If you’re trying not to politicize the Fed, for the Fed chair to be sitting there, trying to put his thumb on the ⁠scale, is a real mistake.”

The Alleged Fraud

Cook was slapped with a criminal referral on Aug. 15 by Federal Housing Finance Agency (FHFA) chairman Bill Pulte, who alleged that Cook lied on one of her mortgage agreements – specifically representing it as her primary residence. 

As the Epoch Times notes further, ten days later Trump sent a letter to Cook informing her of her termination. “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” he said.

After Cook sued, a federal judge in Washington reinstated her. In a more tentative order, the judge said that Trump probably didn’t have a valid cause for firing Cook.

Under this judge’s interpretation, for Trump to fire Cook, he would have to do so for a reason related to an unfaithful execution of her statutory duties while she was in office. Cook’s alleged fraud took place before she began serving at the Federal Reserve.

Trump has asked the Supreme Court to lift this block while litigation continues in lower courts. Typically, these types of appeals, which come on the emergency docket, are decided without oral argument. In this case, however, the Supreme Court deferred its decision until it heard arguments.

The Justice Department told the Supreme Court in September 2025 that not only was Trump’s cause sufficient, but that courts didn’t have the authority to review his determination of that cause.

Reinstating Officials

Separate from Congress’s phrasing, the power of judges to reinstate fired officials is also under scrutiny in both Cook’s case and another case that was heard in December 2025.

For months, lower court judges have been reversing Trump’s firings of high-level bureaucrats. In response, the Trump administration argued that doing so was overstepping judicial authority and that the more appropriate remedy to illegal firings was back pay.

The Supreme Court is expected to address that issue in Trump v. Slaughter, which focused on the president’s ability to fire members of the Federal Trade Commission.

It’s unclear how they will rule, and they didn’t focus much on the issue during oral argument on Dec. 8, 2025. But in its emergency docket decisions, the Supreme Court has indicated some sympathy for Trump’s position.

Cook’s case is unique for multiple reasons, including that it raises questions about whether officials have a constitutional right to their positions in the federal government. In a briefing to the Supreme Court, Cook cited the Fifth Amendment, which says the government cannot take away someone’s property without due process.

The lower court in Washington said that Cook had a property interest in her position and that Trump failed to provide the necessary due process before removing her. Specifically, the judge said that Trump needed to provide some kind of notice and hearing for Cook.

In response, the Justice Department noted that Trump waited five days before dismissing her after notifying her of the charges. Solicitor General D. John Sauer also denied that offices like Cook’s were property and that requiring a notice and hearing would “wreak havoc on sensitive presidential decision-making.”

Federal Reserve Independence

What also makes Cook’s case unique, and what may give her an edge over other federal officials, is how the Supreme Court views the Federal Reserve’s independence.

Last year, a majority of the justices temporarily allowed Trump to remove the heads of two labor boards who had tried to compare their agencies to the Federal Reserve. Allowing Trump’s firings, which overrode similar laws restricting removals, would effectively call into question the independence of the Federal Reserve.

A majority of the justices rejected this comparison, stating that the “Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”

Cook has referenced that language while warning about the purported implications of Trump’s firing. Her attorneys said in September 2025 that the Supreme Court’s earlier recognition of the Fed’s independence “would have little meaning if a ‘for cause’ restriction gave the President unreviewable discretion to simply deem any governor ‘unfit to serve’ based on anything he deems ’misconduct.’”

Allowing Trump to fire Cook, they said, “would sound the death knell for the central-bank independence that has helped make the United States’ economy the strongest in the world.”

Trump, meanwhile, has underscored the nature of his authority under Article II of the Constitution, which vests the federal government’s executive power in the president.

“Article II allows the President to determine what process to follow when removing executive officers, and courts cause irreparable harm to the separation of powers when they wrongly usurp that authority,” the Justice Department said in its brief.

Authored by Jonathan Turley,

Former CNN correspondent Jim Acosta spoke with popular podcaster Jennifer Welch, discussing the plans for radical changes after a Democratic takeover this year. Like many Democratic figures, they said that the expansion of the Supreme Court is obvious.

The expansion is essential to clear away any restraints on a radical agenda that will include the trial of a host of conservatives, from Trump to the young former DOGE employee who was injured when he came to the rescue of a woman in a carjacking in Washington, D.C.

What was most notable in the interview was the priority of expanding the Supreme Court. 

Figures like Eric Holder have expressly stated that packing the Supreme Court with a liberal majority will be the priority after any Democratic takeover.

This has long been the plan among far-left figures, but it is now being embraced by establishment figures as essential to securing a radical agenda to achieve lasting power.

Years ago, Harvard professor Michael Klarman laid out a radical agenda to change the system to guarantee Republicans “will never win another election.” However, he warned that “the Supreme Court could strike down everything I just described.” Therefore, the court must be packed in advance to allow these changes to occur.

This week, Democratic strategist James Carville laid out the step-by-step process of how the pack-to-power plan would work.

“I’m going to tell you what’s going to happen,” he said.

“A Democrat is going to be elected in 2028. You know that. I know that. The Democratic president is going to announce a special transition advisory committee on the reform of the Supreme Court. They’re going to recommend that the number of Supreme Court justices go from nine to 13. That’s going to happen, people.”

Acosta and Welch, however, added a Jacobin touch by demanding trials for a wide range of conservative figures — a call that has been echoed by Democratic members promising impeachments and investigations.

Welch, who appears to be auditioning for the role of Madame Lafarge, insisted:

“The blue tsunami means that Congress is going to haul Elon Musk, ‘Big Balls,’ and a bunch of other people’s a– in front and say, ‘What crimes did you commit?’ And it’s going to get really serious. And the same with Trump because I believe, and this is just my opinion, that Trump and all of the bottom-feeding morons surrounding him and Elon Musk and all the bottom feeding clinger-onners that surround him, I think they commit crimes every day.”

In my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, I discuss how elected officials often try to enlist mobs to advance their political agendas — only to be consumed by the unrest they helped fuel. This yielding to a “mobocracy” was one of the critical dangers that the Framers sought to deter through protections against majoritarian tyranny.

What is most notable is the warning to establishment figures who are dismissed as “integrity Democrats” who might be squeamish about doing the things that must be done to political opponents. As always, Welch was the face of unrequited rage:

“And I think to reconcile all of this is going to take hardcore — not ‘integrity Democrats – ‘F–k you Democrats’ … ‘F–k you for f–king over our country.’ We are serious about this. We are prosecuting. We’re going to uncover every document, every phone call, everything you did. We will be relentless about it. And that’s the mindset they’ve got to have because I think the electorate is going from, ‘We’ve got to get him out, but also we want accountability.’”

With “integrity Democrats” out of the way, the left will be able to change the system to guarantee not just a radical agenda but permanent power, as explained by Klarman. It is a chilling and ironic prospect on the 250th anniversary of the Declaration of Independence.

Jonathan Turley is a law professor and the author of the forthcoming “Rage and the Republic: The Unfinished Story of the American Revolution,” which will be released on Feb. 3 as part of the celebration of the 250th anniversary of the Declaration of Independence.

BlackRock Chief Executive Larry Fink – the new “mayor of Davos” after founder Klaus Schwab resigned last April – used the opening of the World Economic Forum this week to deliver an unusually stark warning to the global elite: Artificial intelligence, if left on its current trajectory, risks deepening inequality, hollowing out the professional class and becoming the next great failure of modern capitalism.

Speaking Tuesday to thousands of executives, policymakers and financiers gathered in Davos, Fink – who spearheaded the ESG scam – argued that the extraordinary wealth created since the end of the Cold War has been distributed too narrowly to sustain social stability – an imbalance he said the AI revolution threatens to accelerate.

“This forum can’t remain an echo chamber,” Fink said. “And we shouldn’t want panels where everyone agrees 95% of the time. Because the world doesn’t.”

“Since the fall of the Berlin Wall, more wealth has been created than in any time prior in human history, but in advanced economies, that wealth has accrued to a far narrower share of people than any healthy society can ultimately sustain,” Mr. Fink said, adding “Most of the people affected by what we talk about here will never come to his conference. That’s the central tension of this forum: Davos is an elite gathering trying to shape a world that belongs to everyone.”

The billionaire head of the world’s largest asset manager warned that the early rewards of AI are flowing almost exclusively to those who own the technology’s foundations – models, data and infrastructure – while wage earners risk being left behind. He drew a direct parallel between the impact of AI on white-collar workers and the disruption globalization inflicted on manufacturing jobs in previous decades.

“The open question: What happens to everyone else if AI does to white-collar workers what globalization did to blue-collar workers?” Mr. Fink said. “We need to confront that today directly. It is not about the future. The future is now.”

A Familiar Critique, Sharpened by AI

Fink has long positioned himself as an internal critic of modern capitalism, using his annual letters to investors and his prominence at Davos to argue that markets must better serve society at large. He was a leading proponent of environmental, social and governance investing and has championed “stakeholder capitalism,” a framework that calls on companies to balance shareholder returns with responsibilities to workers, customers and communities.

As RCP noted a few days ago, Stakeholder capitalism is a concept invented by Schwab. Schwab’s argued for years that capitalism governed by shareholders would be vastly improved by systematically elevating the inputs of other stakeholders, like employees, supply chains, community values and the environment. ESG investing is the analytic framework upon which stakeholder capitalism largely depends. ESG rating agents use non-financial metrics to identify the “best” and “worst” companies to overweight, underweight or exclude in investment portfolios. Stakeholder capitalists broadly embraced the net-zero energy paradigm, aka “Paris +1.5°C by 2050 at all costs”. Net-zero commitments led many European countries to spend trillions on wind and solar investments at the expense of more reliable, more resilient and considerably cheaper energy alternatives, including fossil fuels. WEF’s acolytes have cheered them on as they did.

Except, whoopsie – looks like even Larry admits that’s not gonna work:

Even BlackRock CEO Larry Fink now admits that “transitioning” to solar and wind will cause a global power shortage—after spending years pressuring companies to do exactly that.

The “transition” he advanced has already sabotaged our power supply and raised our electricity bills. pic.twitter.com/wggLJ78xzP

— Alex Epstein (@AlexEpstein) January 18, 2026

In a 2022 letter to investors, published ahead of that year’s Davos summit, Fink urged companies to recognize that their mandate extended beyond profits alone. While BlackRock rolled back many of its diversity, equity and inclusion goals in early 2025, His remarks this week signaled a renewed effort to reshape the debate – this time around AI.

Concerns about AI’s impact on labor extend beyond wealth distribution. Geoffrey Hinton, a Nobel laureate often described as a pioneer of artificial intelligence, has warned that the technology could displace large numbers of white-collar workers while concentrating profits at the top.

“What’s actually going to happen is rich people are going to use AI to replace workers,” Mr. Hinton said last year. “It’s going to create massive unemployment and a huge rise in profits.”

Larry Fink has become an outright socialist. He built his fortune on capitalism and is now rigging the system against future generations.

Capitalism didn’t fail—it was sabotaged by the WEF global elite through cronyism, endless money printing, overregulation, and zero… https://t.co/Oc8FNLrRjS

— Desiree Fixler (@desireefixler) January 19, 2026

The warning comes amid an unprecedented surge in AI-related wealth. Morningstar analysts found that a group of 34 AI-linked stocks – including Amazon, Alphabet and Microsoft – rose more than 50% in 2025. According to the Bloomberg Billionaires Index, the median net-worth increase among the 50 wealthiest Americans last year was nearly $10 billion.

Federal Reserve data show that the bottom half of Americans own about 1% of stock-market wealth, while the top 1% control nearly half of corporate equity. In effect, Fink said, the AI boom is reinforcing a K-shaped economy – one path of rapid wealth accumulation for asset owners, another of stagnation for everyone else.

Palantir CEO Alex Karp chimed in on AI as well at Davos, saying that it will displace so many jobs that it will eliminate the need for mass immigration. 

“There will be more than enough jobs for the citizens of your nation, especially those with vocational training,: said Karp during a WEF panel. “I do think these trends really do make it hard to imagine why we should have large-scale immigration unless you have a very specialized skill.”

Karp suggested that vocational workers will be more valuable, “if not irreplaceable,” criticizing the notion that higher education is the ultimate benchmark of a person’s talents and ability to hold a job.

That said, he also notes that many believe we’re in an AI bubble. 

🚨BREAKING: Palantir CEO Alex Karp says many believe we are in an AI bubble because much of AI simply does not work out of the box.

Karp says off the shelf LLMs are not precise enough for regulated tasks like underwriting, arguing real value only comes from building a software… pic.twitter.com/seuMLxrFpq

— AI Scientist (@AIScientist) January 21, 2026

Blockchain Everything?

Fink also promoted financial tokenization and called digital currency “necessary” – while envisioning all assets sharing a single blockchain to ‘reduce corruption.’

BlackRock CEO Larry Fink speaks on reducing corruption via tokenization of stocks and bonds, while sitting next to Citadel’s Ken Griffin.. pic.twitter.com/vDxPfcJEsi

— Reese Politics (@ReesePolitics) January 21, 2026