Donald Trump's television image over the delegates in the conference hall of the Davos Ski Resort on Thursday, embodying the tremendous influence that the new president brought about a few days after his second term in the Oval Office.
The prime ministers, businessmen and head of the European Central Bank have lined up to see him giving a speech to the World Economic Forum, which is his first speech to a global audience since his return to the White House. One of those present joking about bringing some popcorn to the show.
Trump did not retreat, causing nervous laughter when he issued a series of demands and warnings to allies and competitors.
The Kingdom of Saudi Arabia and other producers must reduce oil prices, and global central banks “immediately” have to reduce interest rates, and foreign companies must increase their investments in American factories or face customs duties. The European Union – which has been subjected to a special contempt – must stop imposing competition fines on major American technology companies.
“We will ask for respect from other countries,” the president said. His predecessor “allowed other countries to benefit from the United States. We cannot allow this to happen anymore. ”
Trump's demands came in the first feverish week in his position in which the president launched a lightning campaign of executive orders and advertisements that not only aims to reshape the state but also confirm the economic and trade superiority of America. It is possible to impose customs duties up to 25% on Canada and Mexico early in February, which would ignore the commercial agreement that Trump negotiated in his first term.
China may face a fee of up to 100% if Beijing fails to agree on a deal to sell at least 50% of the Tiktok application for an American company, while the European Union is required to buy more American oil if it wants to avoid customs duties. . In confirmation of the new American unilaterals, Trump withdrew the United States from the World Health Organization, as well as leaving the Paris Climate Agreement for the second time.
It is striking that Trump has reached a 90 -year -old mysterious item in the American Tax Law threatens to impose tax tax. Double tax rates on foreigners And companies, if their countries, consider that they imposed “discriminatory” taxes on multinational American companies.
This proposal casts a “manual bomb” on the process of making international tax policies. He adds that this step indicates the design on “the formation of the tax policy of other countries through coercion and not through cooperation.”
The plans revealed by the new president this week raises the specter of multi -front economic war, as Trump uses the refreshing power of the American economy to balance the international system in his favor.
The main question, as investors and policy makers say, is whether this is up to a more intense copy of the transaction approach and the conclusion of deals that we witnessed in Trump's first state, or the shift towards unbridled unilateralism, where the White House is unrestricted by the restrictions of international law to intimidate foreign governments and companies .
“It uses everything as a weapon: trade, taxes and energy. The head of one of the largest sovereign wealth funds in the world says:“ I am concerned that financing will turn into a weapon as well. ”Most people are betting that he cares about the stock market – and this is the only choice . This is the fact that he said he wanted to be a peacemaker. ”
In Davos, senior executives in the United States They were keen to welcome Trump's agenda – which indicates that there is little concern within the corporate sector about the possibility of the United States to tear the global regime based on bases.
Customs definitions are an “economic tool”. “This is all,” said Jimmy Damon, CEO of JP Morgan Chase, in an interview with CNBC in Davos this week. “If it is a little inflated, but it is useful for national security, let it be.
The American stock market has increased this week with investors to reduce the might reduce the regulatory rules governing advanced banks and technology companies, as well as announcing huge plans. Artificial Intelligence Infrastructure Project worth $ 100 billion It was launched by Openai and Softbank. By the weekend (until late on Friday afternoon in New York), the Standard & Poor's 500 index increased by 1.8 percent.
“The accounts are reported that people speak to the chief executives and say they all feel very positive,” says Mahmoud Bradan, head of the global macroeconomic department at the Amundi Investment Institute.
“If I ask myself what justifies animal instincts, then raising bank regulatory restrictions is real, and the possibility of lowering taxes on companies is real.”
However, outside the United States, the threat to the expansion of the range of commercial barriers and conflicts over tax policies casts its weight on economic expectations. Valdes Dombrovscis, Economic Commissioner of the European Union, says that the disintegration of global trade will be a special concern for economies such as Europe, as trade represents more than five GDP.
It is cited estimates of the International Monetary Fund that shows this extremist geodicist retailEmphasize it Trade can erase 7 percent of the average global GDP. “If this global economic fragmentation settles – and there is a risk of this – it will have significant negative economic consequences.”
Even while they are preparing to attack customs tariffs, some European policy makers claim to see potential positives.
“It is a new environment that is definitely less comfortable for Europe, but it also provides a lot of opportunities,” says Alexander de Croe, Prime Minister of Belgium. “Europe can appear there that we enjoy stability and that we are in a predictable environment where it can be invested.”
European officials also say they may benefit from the deepest trade relations with other countries that may be removed from the American market. “The two countries come to us because they want to diversify away from the United States,” says one of the senior European Union officials.
“We need to continue to open up, but without being naive,” says Spanish Economy Minister Carlos Cuerbo. “We need to compete with our companies equally, equal conditions, and equal opportunities for others. This was the case with China. This should also be the case with the United States.”
While the United States and Europe have long intercepted Chinese commercial practices, Beijing hastened this week to present itself as a supporter of the global regime based on the rules, not its opponent.
Speaking the next day of Trump's inauguration, Chinese Vice President of the State Council, Deng Xiwa Xiang, insisted that economic globalization “is not a zero game, you are losing and I win.” He said that the largest countries in the world need “leadership leadership”, praising international bodies, including the World Trade Organization and the United Nations.
The paradox of China's introduction to itself as a model of free trade while Trump is seeking concessions from his closest allies using brute economic power, has not been absent from the minds of those present in Davos who were watching Ding's performance.
Despite the barrel of measures With the statements made by the White House this week, most global policy makers take the approach to waiting and anticipation towards Trump's aggressive deals, instead of jumping into conclusions on long -term repercussions on the global economy. Global economic system.
“Why do I put my papers on the table before it does?” A senior European Union official says.
Jonathan Reynolds, the British Minister of Business, admits that there are still “many questions” about the president's approach. “Is it related to influence in negotiations? Is it related to increasing revenues in terms of definitions? ” He says that the United Kingdom will continue to call for a “more open global commercial economy.”
However, there is no doubt that Trump indicates a great escalation of how to use trade as a weapon compared to his first mandate.
“The people around Trump had enough time to build a systematic and systematic approach to protective commercial policy,” said Ally Renison, a former official at the British Ministry of Commerce, who is now working at SEC Newgate. She says that the approach followed will be to build a file of “evidence” against countries, and then use it to extract concessions in the areas of economic and external policy.
The question remains to what extent does Trump wants to go? Jerumin Zetolmire, head of the Bogeril Research Center, says that the risk of trampling on the rules -based system is a complete collapse in diplomatic and legal channels to settle international conflicts.
He warns that if Trump withdraws from a broader range of international frameworks, such as the World Trade Organization or the International Monetary Fund, the arrangements that help in the global economy can “greatly destroy”.
He adds that the extremist condition is that they “really resemble Putin” – that is, by violating the sanctity of international borders. The control of Greenland or Panama channel by force, as Trump threatened, will be a “re -introduction of the jungle law.”
Michael Strin, Director of Economic Policy Studies at the American Enterprise Institute for Research, asks whether Trump will reflect the “basic powers” that drive global economic integration – and whether the president wants to do so. But regardless, he says, uncertainty about its real intentions “makes it difficult for companies to plan, creates a terrible impact on investment, and creates tensions with our allies.”
Some warn of the awe of Trump's threats or embrace capitalism without borders, because his agenda was largely incoherent.
“What we see is huge doses of American arrogance,” says Aransha Gonzalez, Dean of the Paris College of International Affairs at the Institute of Political Science. “The density of all the issues raised on the table and Trump condemned us. But we do not look at the contradictions. It seems as if we were all taking an orange property.
Harright Agyouneh coverage in Davos and Peter Foster participated in London
Imagine data by Keith Fry
