By JOSH BOAK, Associated Press

WASHINGTON (AP) — President Donald Trump plans to use a key address Wednesday to try to convince Americans he can make housing more affordable, but he’s picked a strange backdrop for the speech: a Swiss mountain town where ski chalets for vacations cost a cool $4.4 million.

On the anniversary of his inauguration, Trump is flying to the World Economic Forum in Davos — an annual gathering of the global elite — where he may see many of the billionaires he has surrounded himself with during his first year back in the White House.

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Trump had campaigned on lowering the cost of living, painting himself as a populist while serving fries at a McDonald’s drive-thru. But in office, his public schedules suggest he’s traded the Golden Arches for a gilded age, devoting more time to cavorting with the wealthy than talking directly to his working-class base.

“At the end of the day, it’s the investors and billionaires at Davos who have his attention, not the families struggling to afford their bills,” said Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative, a liberal think tank.

Trump’s attention in his first year back has been less on pocketbook issues and more fixed on foreign policy with conflicts in Gaza, Ukraine and Venezuela. He is now bent on acquiring Greenland to the chagrin of European allies — a headline likely to dominate his time in Davos, overshadowing his housing ideas.

Trump noted the Europeans’ resistance, telling reporters Monday night, “Let’s put it this way: It’s going to be a very interesting Davos.”

The White House has tried to shift Trump’s focus to affordability issues, a response to warning signs in the polls in a year where control of Congress is at stake in midterm elections.

About six in 10 U.S. adults now say that Trump has hurt the cost of living, according to the latest survey by the Associated Press-NORC Center for Public Affairs Research. It’s an issue even among Republicans, who have said Trump’s work on the economy hasn’t lived up to their expectations. Only 16% say Trump has helped “a lot” on making things more affordable, down from 49% in April 2024, when an AP-NORC poll asked Americans the same question about his first term.

The president is banking on investment commitments from billionaires and foreign nations to create a jobs boom, even as his broad tariffs have crimped the labor market and spurred inflation. Trump supporters who attend his rallies — which the president resumed last month — are left to trust that Trump’s business ties can eventually help them.

This strategy carries political risks. Voters are more interested in the economy they’re experiencing in their own lives than in Trump’s relationships with billionaires, said Frank Luntz, the Republican-affiliated pollster and strategist.

“If you’re asking me, ‘Are billionaires popular?’ The answer is no — and they’ve haven’t been for some time,” said Luntz, who last year identified “affordability” as a defining issue for voters.

Wooing billionaires instead of the working class

Since Trump’s first term in 2017, the wealthiest 0.1% of Americans have seen their wealth increase by $11.98 trillion to $23.46 trillion, according to the Federal Reserve.

FILE – President Donald Trump speaks with Elon Musk and Nvidia CEO Jensen Huang, during the Saudi Investment Forum at the Kennedy Center, Nov. 19, 2025, in Washington. (AP Photo/Evan Vucci, File)

The magnitude of those gains dwarfs what the bottom 50% of households — the majority of the country — received during the same period. Their net worth rose by $2.94 trillion, roughly one-fourth what the top 0.1% got.

One of the biggest concerns for voters is the cost of housing. In recent weeks, Trump has floated proposals like reducing interest rates on home loans by buying $200 billion in mortgage debt and banning large financial companies from buying homes. Yet those efforts would do little to address the core problem in the housing market: a multi-year shortfall in home construction and home prices that have generally risen faster than wages.

Trump regularly points to the investments made by the wealthy and powerful as signs of economic growth to come. To encourage billionaires to deliver, Trump in his first year pursued policies on artificial intelligence and financial regulation that can benefit the wealthy, along with tax cuts, reduced IRS enforcement and fewer regulatory burdens for large-scale investments.

“Most billionaires don’t share the interests of the working class,” said Darrell West, a senior fellow at the Brookings Institution who has written about the “wealthification” of U.S. politics. “The ultrawealthy love tax cuts and deregulation, and those preferences make it difficult for government to provide the help that working class people want.”

Trump has been trying to sell tax breaks on tips and overtime pay from what is known as the “ One Big Beautiful Bill ” as benefiting workers. But a Congressional Budget Office analysis indicated that middle-class families may only see savings of $800 to $1,200 a year, on average, while the top 10% of earners would receive $13,600. A separate analysis by the Tax Policy Center, a think tank, said those earning above $1 million would save on average $66,510 this year.

The company Trump keeps

Trump regularly holds public events with the wealthy and powerful at the White House and beyond. He jetted to the Middle East and Asia with billionaires in tow as he had foreign countries announce investment commitments, promising that the money would flow down into factory jobs for the middle class.

At a September dinner with tech billionaires, Trump said it was an honor to be surrounded by the likes of Bill Gates, Tim Cook, Sergey Brin and Mark Zuckerberg.

FILE – President Donald Trump shakes hands with Apple CEO Tim Cook in the Oval Office, Aug. 6, 2025, in Washington. (AP Photo/Alex Brandon, File)

“There’s never been anything like it,” Trump said. “The most brilliant people are gathered around this table. This is definitely a high-IQ group and I’m very proud of them.”

The White House said the previous Biden administration had alienated the business community to the detriment of the economy. “President Trump’s pro-growth policies and friendly relationships with industry titans, on the other hand, are securing trillions in investments that are creating jobs and opportunities for everyday Americans,” White House spokesman Kush Desai said.

Last month, Trump celebrated a charitable contribution of $6.25 billion to the “Trump” investment accounts for children by Michael Dell. It was a chance to talk about economic inequality — but also another opportunity for Trump to showcase his relationship with billionaires.

FILE – President Donald Trump shakes hands with Michael Dell as his wife Susan looks on, during an event on “Trump Accounts” for kids in the Roosevelt Room of the White House, Dec. 2, 2025, in Washington. (AP Photo/Evan Vucci, File)

Trump takes phone calls from billionaires and CEOs to chat about business, politics and interests such as his planned White House ballroom. He regularly peppers his speeches with shoutouts to Nvidia founder Jensen Huang, whose net worth was estimated by Forbes at roughly $162 billion as of Sunday.

He’s installed billionaires in his inner circle such as Commerce Secretary Howard Lutnick (net worth: $3.3 billion) and Special Envoy Steve Witkoff (net worth: $2 billion). He put Elon Musk (net worth: $780 billion) in charge of slashing government payrolls before a dramatic falling-out and, later, a public reconciliation.

White House press secretary Karoline Leavitt at a briefing last month portrayed Trump’s own status as a billionaire as a positive for him with voters.

“I think it’s one of the many reasons they reelected him back to this office, because he’s a businessman who understands the economy and knows how to fix it,” she said.

By JILL LAWLESS, Associated Press

LONDON (AP) — A startled British government on Tuesday defended its decision to hand sovereignty of the Chagos Islands to Mauritius, after U.S. President Donald Trump attacked the plan, which his administration had previously supported.

Trump said that relinquishing the remote Indian Ocean archipelago, home to a strategically important American naval and bomber base, was an act of stupidity that shows why he needs to take over Greenland.

President Donald Trump speaks with reporters after arriving at Palm Beach International Airport, Monday, Jan. 19, 2026, in West Palm Beach, Fla. (AP Photo/Julia Demaree Nikhinson)

“Shockingly, our ‘brilliant’ NATO Ally, the United Kingdom, is currently planning to give away the Island of Diego Garcia, the site of a vital U.S. Military Base, to Mauritius, and to do so FOR NO REASON WHATSOEVER,” he said in a post on his social media platform Truth Social. “There is no doubt that China and Russia have noticed this act of total weakness.”

“The UK giving away extremely important land is an act of GREAT STUPIDITY, and is another in a very long line of National Security reasons why Greenland has to be acquired,” Trump said.

The blast from Trump was a rebuff to efforts by Prime Minister Keir Starmer to calm tensions over Greenland and patch up a frayed trans-Atlantic relationship. Starmer on Monday called Trump’s statements about taking over Greenland “completely wrong,” but called for the rift to be “resolved through calm discussion.”

Remote but strategic

The United Kingdom and Mauritius signed a deal in May to give Mauritius sovereignty over the Chago Islands after two centuries under British control, though the U.K. will lease back Diego Garcia where the U.S. base is located, for at least 99 years.

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The U.S. government welcomed the agreement at the time, saying it “secures the long-term, stable, and effective operation of the joint U.S.-U.K. military facility at Diego Garcia.”

U.K. Cabinet Minister Darren Jones said Tuesday that the agreement would “secure that military base for the next 100 years.”

In recent years, the United Nations and its top court have urged Britain to return the islands to Mauritius, and the British government says it’s acting to protect the security of the base from international legal challenge.

A government spokesperson said that “the U.K. will never compromise on our national security,” and “this deal secures the operations of the joint U.S.-U.K. base on Diego Garcia for generations, with robust provisions for keeping its unique capabilities intact and our adversaries out.”

But the deal has met strong opposition from British opposition parties, which say that giving up the islands puts them at risk of interference by China and Russia.

Islanders who were displaced from the islands to make way for the U.S. base say they weren’t consulted and worry the deal will make it harder for them to go home.

Strong opposition

Legislation to approve the agreement has been passed by the House of Commons, but faced strong opposition in Parliament’s upper chamber, the House of Lords, which approved it, while also passing a “motion of regret” lamenting the legislation. It’s due back in the Commons on Tuesday for further debate.

Conservative Party leader Kemi Badenoch criticized Starmer’s Labour Party government over the agreement.

Badenoch said in an X post that Trump is right and that Starmer’s “plan to give away the Chagos Islands is a terrible policy that weakens UK security and hands away our sovereign territory. And to top it off, makes us and our NATO allies weaker in the face of our enemies.”

Reform UK leader Nigel Farage, an ally of the president said: “Thank goodness Trump has vetoed the surrender of the Chagos islands.”

The U.S. has described the Diego Garcia base, which is home to about 2,500 mostly American personnel, as “an all but indispensable platform” for security operations in the Middle East, South Asia and East Africa.

The Chagos Islands have been under British control since 1814, when they were ceded by France. Britain split the islands away from Mauritius, a former British colony, in 1965, and evicted as many as 2,000 people from the islands so the U.S. military could build the Diego Garcia base.

An estimated 10,000 displaced Chagossians and their descendants now live primarily in Britain, Mauritius and the Seychelles. Some have fought unsuccessfully in U.K. courts for many years for the right to go home.

The U.K.-Mauritius deal calls for a resettlement fund to be created for displaced islanders to help them move back to the islands — apart from Diego Garcia.

By YURI KAGEYAMA, Associated Press Business Writer

TOKYO (AP) — U.S. futures fell sharply and European markets shed more than 1% on tensions driven by the Trump administration’s new tariff threats over Greenland.

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France’s CAC 40 slipped 1.2% to 8,014.42, while Germany’s DAX lost 1.5% to 24,581.44. Britain’s FTSE 100 shed 1.3% to 10,068.04.

The future for the S&P 500 sank 1.8% while that for the Dow Jones Industrial Average dropped 1.6%.

Trump said Saturday that he would charge a 10% import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland because of their opposition to American control of Greenland.

Trump’s threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.

Meanwhile, U.S. Treasury Secretary Scott Bessent, speaking on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland, asserted that America’s relations with Europe remain strong. He urged trading partners to “take a deep breath” and let tensions driven by the tariff threats over Greenland “play out.”

In Asian trading, Tokyo’s benchmark Nikkei 225 lost 1.1% to 52,991.10 after Prime Minister Sanae Takaichi called a snap election for Feb. 8.

Yields on long-term Japanese government bonds surged after Takaichi indicated Monday she planned to dissolve parliament and hold an election, aiming to capitalize on her strong public opinion ratings. She also has proposed temporarily suspending the food tax.

Expectations that Takaichi will take a renewed electoral mandate to raise government spending have revived worries over Japan’s national finances, pushing yields sharply higher, while prices of such investments have fallen as investors sold their holdings. The yield on the 40-year government bond surged to a record 4% on Tuesday, while yields on other long-term bonds also have been surging to decades-high levels.

Chinese markets also declined. Hong Kong’s Hang Seng gave up 0.3% to 26,487.51, while the Shanghai Composite ended nearly unchanged at 4,113.65.

In South Korea, the Kospi dropped 0.4% to 4,885.75, while Australia’s S&P/ASX 200 lost 0.7% to 8,815.90.

Taiwan’s Taiex gained 0.4% and the Sensex in India declined 0.8%.

“Geopolitical events will remain in focus today, particularly any talks that may take place in Davos,” said Michael Brown, a senior research strategist at Pepperstone, referring to the World Economic Forum.

This week will bring more corporate earnings in the U.S. and an update on inflation preferred by the Federal Reserve for making policy decisions.

The U.S. Federal Reserve’s next policy meeting is in two weeks. It’s expected to keep its benchmark interest rate unchanged, as it strives to balance a slowing jobs market with inflation, which remains above the Fed’s 2% goal. The Bank of Japan has a monetary policy board meeting ending later this week.

In other dealings early Tuesday, U.S. benchmark crude oil lost 49 cents to $58.95 per barrel. Brent crude, the international standard, shed 33 cents to $63.61 a barrel.

The U.S. dollar fell to 157.83 Japanese yen from 158.09 yen. The euro rose to $1.1716 from $1.1645.

AP Business Writer Elaine Kurtenbach contributed to this report.

By JAMEY KEATEN, Associated Press

DAVOS, Switzerland (AP) — The European Union’s top official on Tuesday called into question U.S. President Donald Trump’s trustworthiness, saying that he had agreed last year not to impose more tariffs on members of the bloc.

European Commission President Ursula von der Leyen called Trump’s planned new tariffs over Greenland “a mistake especially between long-standing allies.”

She was responding to Trump’s announcement that starting February, a 10% import tax will be imposed goods from eight European nations that have rallied around Denmark in the wake of his stepped up calls for the United States to take over the semi-autonomous Danish territory of Greenland.

“The European Union and the United States have agreed to a trade deal last July,” Von der Leyen said at the World Economic Forum in Davos, Switzerland. “And in politics as in business – a deal is a deal. And when friends shake hands, it must mean something.”

“We consider the people of the United States not just our allies, but our friends. And plunging us into a downward spiral would only aid the very adversaries we are both so committed to keeping out of the strategic landscape,” she added.

She vowed that the EU’s response “will be unflinching, united and proportional.”

Trump has insisted the U.S. needs the territory for security reasons against possible threats from China and Russia.

Earlier Tuesday, U.S. Treasury Secretary Scott Bessent said America’s relations with Europe remain strong and urged trading partners to “take a deep breath” and let tensions driven the new tariff threats over Greenland “play out.”

Scott Bessent, US Secretary of the Treasury, holds a speech at the USA House during the Annual Meeting of the World Economic Forum in Davos, Switzerland, Tuesday, Jan. 20, 2026. (AP Photo/Markus Schreiber)

“I think our relations have never been closer,” he said.

Trump’s threats spark diplomatic flurry across Europe

The American leader’s threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.

The EU has three major economic tools it could use to pressure Washington: new tariffs, suspension of the U.S.-EU trade deal, and the “trade bazooka” — the unofficial term for the bloc’s Anti-Coercion Instrument, which could sanction individuals or institutions found to be putting undue pressure on the EU.

Earlier Tuesday, Trump posted on social media that he had spoken with NATO Secretary General Mark Rutte. He said “I agreed to a meeting of the various parties in Davos, Switzerland,” which is hosting the World Economic Forum’s annual meeting this week.

France’s Macron suggests G-7 meeting in Paris this week

Trump also posted a text message from Emmanuel Macron in which the French president suggested a meeting of members of the Group of Seven industrialized democracies in Paris after the Davos gathering.

Later, however, Trump posted some provocatively doctored images. One showed him planting the U.S. flag next to a sign reading “Greenland, U.S. Territory, Est. 2026.” The other showed Trump in the Oval Office next to a map that showed Greenland and Canada covered with the U.S. Stars and Stripes.

In a sign of how tensions have increased in recent days, thousands of Greenlanders marched over the weekend in protest of any effort to take over their island. Greenland Prime Minister Jens-Frederik Nielsen said in a Facebook post Monday that the tariff threats would not change their stance.

“We will not be pressured,” he wrote.

In his latest threat of tariffs, Trump indicated that the import taxes would be retaliation for last week’s deployment of symbolic numbers of troops from the European countries to Greenland — though he also suggested that he was using the tariffs as leverage to negotiate with Denmark.

Danish minister called for a stronger Europe in the face of Trump’s threats

Denmark’s minister for European affairs called Trump’s tariff threats “deeply unfair.” He said that Europe needs to become even stronger and more independent, while stressing there is “no interest in escalating a trade war.”

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“You just have to note that we are on the edge of a new world order, where having power has unfortunately become crucial, and we see a United States with an enormous condescending rhetoric towards Europe,” Marie Bjerre told Danish public broadcaster DK on Tuesday.

Speaking on the sidelines of Davos, California Gov. Gavin Newsom slammed Europe’s response to Trump’s tariff threats as “pathetic” and “embarrassing,” and urged European leaders to unite and stand up to the United States.

“It is time to get serious, and stop being complicit,” Newsom told reporters. “It’s time to stand tall and firm, have a backbone.”

European markets open sharply lower

European markets opened sharply lower on Tuesday and U.S. futures fell further as tensions rose over Greenland. Benchmarks in Germany, France and Britain fell about 1%. The future for the S&P 500 lost 1.5% and the Dow future was down 1.4%.

With U.S. trading closed Monday for a holiday, financial markets had a relatively muted response to Trump’s threat to put a 10% extra tariff on exports from eight European countries that have opposed his push to exert control over Greenland. Jonas Golterman of Capital Economics described the situation as a lose-lose one for both the U.S. and the targets of Trump’s anger. He said, “It certainly fells like the kind of situation that could get worse before it gets better.”

UK replies to Trump’s Chagos Islands criticism

In another sign of tension between allies, the British government on Tuesday defended its decision to hand sovereignty of the Chagos Islands to Mauritius after Trump attacked the plan, which his administration previously supported.

Trump said that relinquishing the remote Indian Ocean archipelago, home to a strategically important American naval and bomber base, was an act of stupidity that shows why he needs to take over Greenland.

The United Kingdom signed a deal in May to give Mauritius sovereignty over the islands, though the U.K. will lease back the island of Diego Garcia, where the U.S. base is located, for at least 99 years.

AP writers Sylvie Corbet in Paris, Jill Lawless in London and Elaine Kurtenbach in Bangkok contributed to this report.