Trump Brings America-first Economics Back to Davos
Tomorrow, newly inaugurated President Donald Trump will make a virtual appearance at the World Economic Forum to deliver remarks on U.S. economic policy and his administration’s vision for global trade. President Trump’s remarks are expected to reinforce his vision for America-first business policy, which includes a lower corporate tax rate and deregulation, as well as aiming to protect American jobs and businesses through the use of tariffs and other tools.
Business leaders tuning into President Trump’s speech at Davos should pay attention to his stance and positions on global trade. While certain policy positions are known, it is possible that President Trump could announce new policies that would upend the status quo. Organizations across industries should already be planning how these shifts in policy may impact supply chains and relationships with key trade partners, and leaders should start planning how they will communicate with key stakeholders, including their employees, customers, investors and local communities.
President Trump brings a sharp break from the Biden administration on economic policy, both in style and substance. This shift started immediately after President Trump took office and will continue throughout his administration as he reshapes American tax and trade policy.
Under President Trump, the U.S. government is expected to change policies from the prior administration. If past is prologue, those changes may come at a fast pace and without much run-up. President Trump has expressed a desire to use tariffs as a foreign policy tool. On day one of his presidency, President Trump already initiated the process of withdrawing the United States from several international cooperative agreements, including the World Health Organization and the Paris Climate Agreement. This has already been met with significant reaction from multiple Davos panelists and is certain to be a point of discussion in the administration’s meetings with business leaders.
While organizations should expect the Trump Administration to implement what are viewed as pro-business policies, the president’s policies geared towards supporting growth are markedly different from previous administrations – including Republican ones.
As a first step, the Trump administration has directed all federal agencies to re-evaluate American trade policy with other countries, including close U.S. allies. Among the policy shifts under consideration are significant tariffs on all goods imported from Canada, Mexico, the European Union, China and a host of other nations. President Trump has said that he may announce a 25% tariff on all goods from Canada and Mexico as early as February 1.
Leaders at Davos and elsewhere should also consider how changes to tax policy may impact business operations. Republicans in Congress, with President Trump’s support, are developing legislation that would extend the 2017 Tax Cuts and Jobs Act, and potentially further lower taxes for American-owned companies and high-income earners. With control of Congress and the White House, Republicans are likely to pass tax legislation, but the extent of the cuts remain unknown, as many Republicans are wary of growing the deficit. President Trump, and others, believe that tariffs could serve as one such way to pay for the cuts.
The Trump administration has also announced new executive orders to boost American oil and gas production, including declaring a “national energy emergency” that will open new federal lands to drilling. President Trump has also signaled opposition to electric vehicle subsidies and has directed his administration to hold funding for EV charging stations. These announcements will have significant impacts to global energy companies, auto manufacturers, organizations focused on semiconductors and more.
President Trump has also pledged to help bolster the cryptocurrency industry, make the United States the “crypto capital” of the world and create a government-owned cryptocurrency reserve. While there have been no specific announcements since the inauguration, new leadership at the Securities and Exchange Commission has taken steps to study new regulatory frameworks for digital currencies.
The Trump administration will bring a markedly different approach to global business and trade, and tomorrow’s speech will serve as an introduction to what businesses around the world can expect over the next four years. While future policies may include new priorities, President Trump’s remarks will set the tone.
For more information, please contact FleishmanHillard’s public affairs team at [email protected].
