Donald Trump got one step closer to a second presidential term with his expected overwhelming victory in Iowa. The prospect is triggering "sheer panic" among European leaders, according to one geopolitical expert who spoke at the World Economic Forum in Davos, Switzerland.
"Everyone's talking about it," said Ian Bremmer, president of Eurasia Group, in an interview with Yahoo Finance. "I mean, there's a lot of ice out there. Right under the ice — just under the ice — is sheer panic on the part of certainly every European leader you may have seen."
Part of the reason is because Trump is not likely to support Ukraine's position in its war against Russia, said Bremmer. The former president "considers Zelensky a personal and political enemy" and will demand that Ukraine partition its land to cede to Russia. That could, in turn, trigger a fragmentation within NATO and the European Union as countries choose sides.
"This is the biggest risk that the Europeans have seen since the fall of the Berlin Wall in 1989," Bremmer said.
President Zelensky made his case for continuing support to the delegates gathered in Davos, including European Commission president Ursula von der Leyen; US national security adviser Jake Sullivan; and Chinese Premier Li Qiang.
Bremmer said that every European leader he's speaking to privately is concerned about a potential Trump win in November. One has made the case publicly: Christine Lagarde, president of the European Central Bank.
"If we draw lessons from history, by which I mean to say the manner in which he [Trump] carried out the first four years of his mandate, it is clearly a threat," Lagarde told France 2 TV.
But it's not just European leaders who are worried. Bremmer called the United States a "democracy in crisis." In his closely watched "Top Risks" report released earlier this month, he named "The United States vs. Itself" as the No. 1 risk for 2024.
That said, Bremmer said a Trump presidency wouldn't necessarily pose an imminent threat to the economy and markets. "Last time around, there was a positive market impact to Trump winning. Why? Massive near-term deficit spending — markets like that. Regulatory rollback — markets like that. And also lower taxation."
On the other hand, the knock against America's credibility globally could cause cracks in the country's credit rating over the longer term.
Other Davos participants were more diplomatic when it came to the election.
Bill Gates, who recently wrote, "I believe the 2024 elections will be a turning point for both health and climate," demurred when asked by Yahoo Finance who he's voting for. But he did point out that the US government has the biggest healthcare research and development budget in the world, so it plays a pivotal role.
"Getting the group in that maintains generosity, spends that money well for health challenges and climate challenges — I hope we achieve that," he said.
Read the latest from the World Economic Forum in Davos, Switzerland:
IMF managing director on AI's impact: New social safety nets may be needed
IMF managing director Kristalina Georgieva on crypto: It's not money
Microsoft co-founder Bill Gates on AI's impact on jobs: It's great for white-collar workers, coders
Generative AI is miracle technology for profit-hungry CEOs: PwC survey
Julie Hyman hosts the 3-5 p.m. ET show on Yahoo Finance Live. Follow Hyman on Twitter/X @juleshyman.
Read the latest financial and business news from Yahoo Finance
