Trump's Davos Speech: The Good, the Bad, and the Ugly
President Donald Trump doubled down on both domestic deregulation and protectionism in his speech to the World Economic Forum.

President Donald Trump spoke virtually to global business leaders and politicians at the World Economic Forum's annual meeting in Davos, Switzerland, on Thursday. His remarks covered a wide range of topics, from artificial intelligence to Ukraine, but they were mostly focused on economic policy.
To realize the "golden age of America," Trump declared, he must confront the "economic chaos" of the last administration. He promised to reverse "energy restrictions" and "crippling regulations," and he complained about $8 trillion "in wasteful deficit spending" under President Joe Biden. (The national debt increased by more than $7 trillion during the first Trump administration.)
Trump promised to lower the 21 percent federal corporate income tax to 15 percent, which he described as "about as low as it gets, and by far the lowest of a large country." A corporate income tax of 15 percent indeed would make the U.S. more attractive to businesses than such spots as China (where the rate is 25 percent) or Japan (just over 23 percent).
Trump touted his regulatory freeze, promising to "eliminate 10 old regulations for every new regulation," and he pledged to lean heavily into fossil fuel production, which he claimed would "reduce the cost of virtually all goods and services." The price of energy and the extent of regulation contribute to production costs; decreasing both, coupled with lower tax rates, will indeed make American companies more productive and profitable, and their products cheaper.
Trump also welcomed $600 billion worth of Saudi Arabian investment and said he'd ask "the crown prince…to round it out to around $1 trillion." Indeed, Trump values foreign investment in the American economy so highly that he wants to force it: He threatened the CEOs in attendance with unspecified tariffs if they don't produce in the U.S.
That wasn't the president's only plunge into protectionism. He bemoaned billions of dollars of trade deficits with the European Union, Canada, and Asian countries, and he told Canada: "If you're a state, we won't have a deficit. We won't have to tariff you." (If that sounds confused to you, you're right.) Trump failed to recognize that imposing tariffs on intermediate and final goods will raise the cost of living for Americans, contradicting his promises to reduce it.
Trump also offered some comments on monetary policy. After blaming the Biden administration for "the worst inflation crisis in modern history," he said he would "demand that interest rates drop immediately." Higher interest rates, of course, are one of the Federal Reserve's primary tools for combatting inflation.
In short, the economic vision Trump presented to Davos is a mixed bag. Hopefully he'll spend more time removing regulations and lowering corporate taxes than hiking tariffs and, in so doing, effectively taxing Americans.
Editor's Note: As of February 29, 2024, commenting privileges on reason.com posts are limited to Reason Plus subscribers. Past commenters are grandfathered in for a temporary period. Subscribe here to preserve your ability to comment. Your Reason Plus subscription also gives you an ad-free version of reason.com, along with full access to the digital edition and archives of Reason magazine. We request that comments be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of reason.com or Reason Foundation. We reserve the right to delete any comment and ban commenters for any reason at any time. Comments may only be edited within 5 minutes of posting. Report abuses.
Please
to post comments
Tax cuts are good if they generate more economic growth and increase federal revenue. But that's not guaranteed. Especially when combined with protectionist policies that will slow the economy lowering both imports and exports.
Deregulation is good, though in practice it has amounted to slower growth in the regulatory state, not cuts in the total amount of regulations.
The only energy production he can influence is what's done on federal land which, last I checked, accounts for around 25% of the total. And the best he can do is make leases available. He can't force anyone to drill. Not only that but there's already nearly 90,000 wells that are producing on federal land. How many more to people think will be drilled?
Neither of those thing will offset the pain that will result from his planned protectionism. And even if they did, it still means we'd be better off without it.
Politicizing the Fed won't help either.
Corporate taxes should be zero. The earnings should be taxed at the shareholder level. We fudge this by splitting the tax rate between the company and the gains. Why should grandma pay the same tax rate on her amazon earnings as Jeff Bezos?
That said, it's problematic to have earnings deferred "forever".
In a guns and butter world, I'd argue for distributing dividends as a pre-tax expense on an annual basis.
In a tech world, companies never turn a taxable profit, anyway.
I'm not a sufficiently expert accountant to have a good answer.
End the fed.
Stop the runaway spending.
This isn't rocket science.
What about rocket surgery?
Well as Trump has already proven the threat of tariffs is a powerful negotiating tactic. See Canada, Mexico and Colombia. And telling the WEF to fuck off was the most libertarian thing I've seen in a long time.
Throwing a tantrum and imposing tariffs, sanctions and travel bans is not a "negotiating tactic". It is bullying and causes long term harm to the US interests.
Seemed to work exceptionally well with Colombia.
EXCEPTIONALLY well.
oh FFS.
Foreign countries are not "friends"
The only thing Trump is doing differently is saying the quiet parts out loud, and in a more believable way.
Bullying EUROPE is the most ridiculous concept ever. Oh no, the colonial powers might retire to their fainting couches.
US interests? You mean the kind of interests those WEF globalists want to shove down our throats?
If Trump harms those, I might start to like him more.
I really don’t care, Margaret.
"And telling the WEF to fuck off was the most libertarian thing I've seen in a long time."
Libertarian. Heart-warming. Precious. Re-invigorating...
Always nice to use other peoples money for your negotiations. And as Trump proved in his negotiations on the Cares Act, he isn't good at negotiations and wasted trillions burning down the economy.
Must be lady troll day.
???
Did I misgender you? Sorry dude.
Uh, no... I thought you might have mistaken my comment for sarcasm. Just to be clear, any day someone tells the WEF to fuck off is a good day in my book.
So since people are seeing through the lies of globalist one way "free markets", it is time to change the work protectionism to mean any response to foreign governments actions against the US. Huh.
We just saw a threat of tariffs stop Columbia from refusing their own citizens returns.
Trump has also said he will remove tariffs as soon as other countries do as well.
In a Thursday night interview with Fox News host Sean Hannity, the president showed his reluctance to escalate the trade war, stating that he would "rather not" impose tariffs on China. He has emphasized this week his willingness to negotiate with Chinese President Xi Jinping and has so far averted a clash between the world's two largest economies.
"We have one very big power over China, and that's tariffs, and they don't want them," Trump told Hannity in an interview that aired Thursday, adding, "And I'd rather not have to use it. But it's a tremendous power over China."
https://www.zerohedge.com/markets/trump-tells-hannity-would-rather-not-slap-tariffs-china-negotiations-ongoing
So it is not protectionism but using a power available to stop bad acts against the US.
You're conflating different things.
Tariffs are obviously a burden on both parties, and when the burden is disproportionate, you have leverage.
But we should not lose site of the fact that tariffs come at the expense of US consumers. The only question is how readily you can substitute the target's goods with goods of equal quality/price.
So, if you normally buy widgets from China for $1, and your alternative is paying Mexico $2, then tariffs are a tax on your own consumers.
But it's different if you can get the same goods from Vietnam for $1.02.
It's also ineffective if your purchase of the goods from Vietnam means that Australia shifts their purchases to China.
Context matters.
So in all your bullshit you missed the primary point of my comment.
US being tariff free while other countries utilize higher tariffs is not a fucking free market. Your advocating for advantaged markets like globalists and WEF want. Intentionally disadvantaging the US.
It is you who don't understand what you're advocating for.
Free trade means your government doesn't give a shit if other governments use tariffs. Your government doesn't punish you for the actions of other governments. It puts you as the consumer first.
Businesses don't like that so much. They want to be protected. So their goal is to restrict imports to give themselves an advantage.
What you are doing is promoting protectionism and calling it free trade. Then you call other people liars. Must be a day that ends in 'y'.
the tariff drumbeat is getting really fucking boring.
If he hadn't brought up raising tariffs every single day for the last four years, didn't continue to promise them, and if economists didn't universally agree that they're a bad idea, then the drumbeat would stop.
I note that economists do not tend to be super rich.
You'd think with their knowledge, they'd clean up.
But they do not.
Weird.
Textbook ad hominem. Bravo. Economists are wrong because they're not rich. I'm sure you scored some points with that one.
my issue is the authors are purposefully misdirecting the reader. or they're morons. either way it's fucking boring.
What I still fail to understand is why conservatives are so gung ho to raise taxes and make things cost more while hurting domestic exporters. They pretend tariffs have no cost, wave the costs away, or start shouting "Regyoulayshunz!"
It it partisanship? Cult of personality around Trump? Deliberate ignorance of economics?
I don't get it.
I believe it requires reassessment of your interpretation of the use of the proposed tariffs.
What? That they're a magical negotiating tool he'll use to force our major trading partners to bend to his will? What if they tell him to get fucked and we end up an international trade war? What if he's not being totally truthful and just wants tariffs for their own sake?
Trump is a businessman. That means he looks at things from the point of view of the business, not the consumer. So of course he's going to favor protectionism and mercantilism. It's good for business (except that it isn't as Adam Smith showed two and a half centuries ago).
Would you go to a mechanic who can’t keep his own car running?
"Textbook ad hominem"
NO IT ISN'T! No, you fantastically retarded fuck.
You're getting it wrong on purpose just for engagement, aren't you?
So desperate. So pathetic. *yawn*
Sorry dude, but there's nothing more pathetic than a drunken, wife-beating retard who can't wrap his head around the definition of certain fallacies even after six fucking years.
You post the same stupid shit, over and over, day after day. Do you have a text file that you copy and paste from? If not you should create one. It would be a lot more efficient than typing the same pathetic, desperate pleas for attention, every single time.
Ctrl-V: "Democrats did it first, so it's ok"
-sarcasmic
Jack. A half-honest writer at Reason.
$5T of that $7T Trump 1st Term debt was the Cares Act.
So the full honesty is Trump added debt at ~$0.8T/yr.
Biden in contrast added ~$2.2T/yr (there was no excuse at all for ARPA).
And contrary to the Cares Act (full [D] support); Republicans didn't support ARPA at all.
It is always amazing how so much of the media does not understand Trump. I say this as a non-Trump voter, who feels that Trump was a mediocre president although better than the ultimate disaster of a president Biden was. Trump is not an deeply ideological animal, but rather envisions everything as a negotiation. When I say everything, I mean everything. He uses threats as a cudgel to get closer to what he wants. He requests far more than what he expects to get closer to what he wants.
^ This guy read his book.
True story.
Trump was never a politician before 2016. He wasn't a senator, congressman, or bureaucrat, nor did he serve in any administration. He didn't come to power through the beast.
He was always a New York real estate shark, and his approach to negotiations should be viewed as such. The United States is his company and he's going to get the best deals he can for it.
And fortunately this is the same approach that 90% of humanity uses so most of the countries he's interacting with understand him far better than the WEIRDs do.
That word - 'hopefully' - you have been using. I am not hopeful.
"President Donald Trump doubled down on both domestic deregulation and protectionism in his speech to the World Economic Forum."
The Persians.
The Babylonians.
The Macedonians.
The Romans.
The Mongols.
The Huns.
Napoleon.
Hitler.
Stalin.
...and now the globalists want to take over the world...for our own good.
Human nature never changes.
"To realize the 'golden age of America,' Trump declared, he must confront the 'economic chaos' of the last administration.
Wait...didn't the Golden Age of America officially begin on January 20? I thought our lost national greatness had been reclaimed (again) when Trump took office!