As Donald J. Trump took the oath of office in Washington on Monday, the crowd at a jam-packed party held by Ukrainian business groups in Davos, Switzerland, intently watched the ceremony on huge screens.
The event, on the sidelines of the World Economic Forum’s annual conference, seemed to be a display of enthusiasm for the returned American president. Speakers praised Mr. Trump and predicted that he would be a valuable partner for Ukraine in its war against Russia, despite his criticism of U.S. spending on the military effort. Waiters served mini cheeseburgers on red-and-blue buns (“American food,” attendees whispered). A few people applauded at the end.
Yet the apparent optimism was a thin veneer over deep uncertainty.
“We expect President Trump to surprise us, but we do not know what the surprise will be,” Andy Hunder, president of the American Chamber of Commerce in Ukraine, said at the party.
Mr. Trump’s return to the White House has plunged Europe’s business leaders and policymakers into a precarious era, and officials have been bracing for it behind the scenes. The European Commission — the European Union’s executive arm — formed a never-officially-announced group, sometimes colloquially referred to as a “Trump task force,” which spent much of 2024 working on possible responses to changes to American trade and foreign policy.
Yet it is difficult for companies and government officials to know what is bluster, or bargaining chip, and what is reality. And they have learned from the first Trump administration that criticizing the American president too overtly might accomplish little and could draw attention and even retribution.
So companies and governments alike are treading carefully to curry favor with, or at least avoid angering, the mercurial president of the world’s most powerful nation.
The European Commission is a case in point. Staff members on the task force spent 2024 researching possible detailed responses to the new American presidency. But in public, top officials have expressed only a willingness to negotiate in response to potential tariffs and other threats, while vaguely warning that they would retaliate to protect the bloc’s own interests if necessary.
Ursula von der Leyen, the commission’s president, suggested in the days after Mr. Trump’s election that Europe could buy more American liquid natural gas. That is something Mr. Trump has said Europe must do to avoid tariffs.
“The one thing they can do quickly is buy our oil and gas,” Mr. Trump reiterated to reporters in the White House after his inauguration on Monday. “We will straighten that out with tariffs, or they have to buy our oil and gas.”
But Ms. Von der Leyen has often spoken only in generalities about how Europe might respond to trade restrictions.
“A lot is at stake for both sides,” she said during a speech in Davos on Tuesday, adding that “our first priority” would be to negotiate.
“We will be pragmatic, but we will always stand by our principles,” she said. “We will protect our interests, and uphold our values.”
The task force had a wide remit but was heavily focused on tariffs, multiple people familiar with the group’s work said. They requested anonymity to discuss the private talks.
Olof Gill, a European Commission spokesman, confirmed the group’s existence but noted that it was operational throughout 2024 — well before the actual election — and was not officially called the “Trump task force.”
The group was headed by Alejandro Caínzos, an experienced staff member with expertise in international relations. He declined to comment for this article.
One strategic reason for keeping the work relatively quiet is that Europe appears to be trying to keep its options open.
Jörn Fleck, senior director with the Europe Center at the Atlantic Council, said the bloc was being more disciplined than it was in the first Trump administration, and “not getting drawn into political reaction cycles.”
“That’s an important learning curve that the E.U. went through,” he noted.
Europe’s planning for possible trade disruptions also comes in contrast to its behavior in the first Trump administration, Mr. Fleck said. Back then, tariffs on steel and aluminum surprised America’s allies across the Atlantic Ocean.
Even so, any preparations may have limits.
The situation in 2017 was “a much more limited threat,” said Ignacio García Bercero, a former official at the Directorate General for Trade of the European Commission who is now at the research group Bruegel. This time, Mr. Trump has threatened to impose across-the-board tariffs if he sees fit, rather than one-off levies on particular industries.
And Mr. Trump’s second-term actions could span multiple policy arenas, wrapping together energy, trade and defense goals.
In response, European countries “need to get much more creative,” Mr. Fleck said.
In some ways, Mr. Trump’s arrival is hastening changes that were already coming. Ian Lesser, who leads the German Marshall Fund’s Brussels office, noted that while Mr. Trump’s rhetoric could hasten more European military spending, that change was widely seen as needed.
“The big questions he raises only reinforce existing concerns,” Mr. Lesser said.
Still, Mr. Trump could force European policy to evolve more rapidly.
On Feb. 3, the European Council — which comprises the leaders of the 27 E.U. countries — will gather at a château outside Brussels to talk about the way forward on security matters, including issues like financing and common procurement. Notably, Prime Minister Keir Starmer of Britain will attend that event, the first time that a British premier has met with the full group since the country voted to exit the European Union in 2016.
That highlights a possibility arising from all of the looming uncertainty.
While many in Europe are worried that Mr. Trump will strike one-by-one deals with countries in Europe — cleaving the union apart — it is also plausible that pressure could draw Europe and its partners closer together.
“I think that the public will see that there is strength in negotiating as a bloc,” said Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, during an interview in a Davos cafe.
Before Monday’s inauguration in Washington, François Bayrou, the French prime minister, criticized the United States for its “domineering policy” stances. But in the face of that, he said, European nations should work together.
“It’s a decision that’s up to us, the French and the Europeans,” Mr. Bayrou told reporters in Pau, a town in southwestern France where he is still mayor. “Because obviously, without Europe, it’s impossible to do it.”
Aurelien Breeden, Jenny Gross and Catherine Porter contributed reporting.