The World Economic Forum took place last week in Davos, Switzerland, where tensions around Greenland eased, while Canadian Prime Minister Mark Carney sparked conversation about economic powerhouses using their economic might to benefit their own isolation policies.

During his speech, Trump said he wants to negotiate for control of Greenland, brushing aside the potential use of military force to annex the territory, which belongs to Denmark.

Following the speech, Trump said he had a framework in place for Greenland after discussing the situation with the Secretary General of the North Atlantic Treaty Organization. Secretary General Mark Rutte said that Denmark is open to allowing greater access to Greenland by the U.S., which will give it the opportunity to build its “Golden Dome” missile defence system. Trump said it was necessary to keep Russia and China out of Greenland. They did not discuss the sovereignty of Greenland.

The prior day, Carney said economic powers are using economic integration as weapons. He went on to say that middle-power countries should unite to push back against superpowers.

Trump responded by saying that Canada is not grateful for its relationship with the U.S. What that means for the Canada-United States-Mexico Agreement (CUSMA) is yet to be seen. U.S. Commerce Secretary Howard Lutnick said that negotiations on the renewal of CUSMA may begin this summer and Canada’s recent agreements with China may seep into the conversation.

Canada saw a pickup in inflation during December, largely in response to the two-month GST/HST holiday that began in 2024, which created lower base prices for this year’s comparison. Canada’s annual inflation rate was 2.4% in December, up from the 2.2% rate in November. Economists were expecting a rate of 2.2%.

Because of December 2024’s tax holiday, prices at restaurants surged higher, rising by 8.5%. Conversely, shelter prices softened, while transportation prices declined.

Two key core measures of inflation, median and trimmed, moderated to 2.5% and 2.7%, respectively, in December.

Meanwhile, retail sales increased by 1.3% in November, rebounding from a 0.3% decline in the previous month. Looking ahead, Statistics Canada estimates a decline of 0.5% in December, which would take back some of the gains in November.

The report did little to change expectations for the Bank of Canada (BoC) to hold interest rates steady on January 28. Inflation remains largely contained. At the end of 2025, the BoC said its policy interest rate was accommodative and would be willing to shift policy if economic conditions change.

The personal consumption expenditure price index (PCE) rose by 2.8% on a year-over-year basis in November after rising by 2.7% on a year-over-year basis in October. Data from both months were included in this report due to the U.S. government shutdown in the fall of 2025.

The annual core PCE also rose to 2.8% in November.

Meanwhile, personal spending increased by 0.5% in November, its sixth straight increase. Spending on services increased by 0.4% during the month. The U.S. consumer continues to push spending higher, demonstrating their relative strength.

U.S. economic growth was revised higher to 4.4%, annualized, in the third quarter of 2025 in a second and final estimate. Stronger consumer spending and exports drove better-than-expected growth over the quarter.

The U.S. Federal Reserve Board (Fed) makes its interest rate announcement on January 28. The Fed will closely monitor this inflation report, given the PCE is its preferred inflation gauge and inflation continues to run above its 2% target.

Gross domestic product in China expanded by 4.5% on a year-over-year basis in the fourth quarter of 2025. This was down from the 4.8% pace of growth in the third quarter and was the slowest rate of expansion since the fourth quarter of 2022.

Soft domestic demand and a weak property market continue to challenge the strength of China’s economy.

Conversely, net exports were a positive contributor in the fourth quarter. China reached a tariff truce with the U.S. during the quarter, but exports to the U.S. remain soft. China has accelerated its trade with other countries around the world.

Industrial production increased by 5.2% on a year-over-year basis in December. This marked the fastest increase since September, owing to a rise in output for mining, electricity and communication equipment.

Despite the slowdown in the fourth quarter, 2025 growth met the government’s 5% target. Beijing hopes its efforts to boost spending through looser fiscal and monetary policy measures will result in a pickup in overall economic growth in 2026.