Trump at WEF: ‘Make in America, else face tariffs’

US President Donald Trump on Thursday offered the business elite gathered in Davos for the World Economic Forum (WEF) the lowest taxes if they made their products in the US, and threatened higher tariffs if they don’t.

Trump, whose appeal aligns with his “Make America Great Again” campaign call, told delegates that “under the Trump administration, there will be no better place to create jobs, build factories, or grow a company. ”

“Come, make your product in America, and we will give you among the lowest taxes of any nation on Earth,” he exhorted, while adding:”If you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff—differing amounts—that would trickle “hundreds of billions of dollars and even trillions of dollars” into the US treasury and strengthen the US economy and pay down debt.

In rhetoric and actions, Trump has indicated that the US is entering an era of reduced regulations and enhanced pro-business policies.

On his first day in office, Trump issued an executive order that loosened regulations around energy production. The administration, Trump said in his remarks, has embarked on the “largest deregulation campaign in history.”

Trump’s stance towards the private sectors has increased optimism among business heads.

In a survey conducted in December, the US National Federation of Independent Business found that its Small Business Optimism Index hit its highest point since 2018.

“The economic confidence is soaring like we haven’t seen in many, many decades,” Trump added.

Nonetheless, business leaders have also long expressed concern over Trump’s protectionist rhetoric and positions.

Trump, for instance, routinely threatens to impose tariffs—which most economists agree are inflationary and suppress economic growth—on major economies like China, Canada and Mexico.

Following his address, Trump answered questions about economic growth and regulation from Stephen Schwarzman, chairman and CEO and co-founder of BlackRock; Ana Botin, executive chair of Banco Santander; Patrick Pouyanné, chairman and CEO of TotalEnergies; and Brian Moynihan, chair of the board and CEO of Bank of America.

In a question to Trump, Schwarzman asked about how the US might deal with business regulations in the European Union, which has long had stricter rules related to issues such as workers rights and climate impact.

Trump urged the EU to “speed up their process,” adding that Europeans “want to be able to compete better, and you can’t compete when you can’t get through the approval process fast.”

Public and private sector leaders in Europe have been rethinking regulation in order to promote growth on the continent.

Late last year, for instance, three of Europe’s largest business federations urged EU policymakers to reform regulation to make sure companies can compete with the US private sector.

The federations’ open letter followed the release of a significant report by former European Central Bank President Mario Draghi that warned European competitiveness was waning at an alarming speed.

In response to a question from Pouyanné about liquid natural gas trade, Trump touted his administration’s efforts to deregulate energy production and build electrical plants that can power artificial intelligence (AI) data centres.

“We need double the energy we currently have in the United States for AI to be as big as we want to have it, because it’s very competitive,” Trump said, adding that “good clean coal” could also be used as a backup power source.

Trump also outlined his administration’s plans to lower the corporate tax rate from 21% to 15%.

“The 15% is about as low as it gets,” Trump said in response to a question from Moynihan on the impact of inflationary policies. “By far the lowest of a large, rich, powerful country.”

Trump added, however, that the lower tax rate will only be applicable to companies that make their products in the US. “That’s going to create a tremendous buzz,” he added.

Upon taking office, Trump also pulled the US out of the global corporate minimum tax deal, a significant agreement finalized in 2023 that mandated a minimum tax rate across 140 countries.

The deal aimed to avoid a race to the bottom on national tax rates and curb corporate tax evasion. In an executive order signed earlier this week, Trump said the deal “has no force or effect in the United States.”

In response to a question from Botin about deregulation and reducing bureaucracy, Trump said his effort to reduce regulations will have a “huge impact on the economy.”

Trump also said that the US would continue to engage in international trade, but that the US is “going to be demanding respect from other nations” and would implement policies like tariffs to reduce trade imbalances.

On US-China relations, Trump said he is optimistic that the two countries can maintain a “very good relationship,” adding that “all we want is fairness.”

In the World Economic Forum’s latest chief economists outlook, 68% of chief economists surveyed said they expect very significant changes to US trade policy under the Trump administration and almost half (47%) say they expect a positive or somewhat positive short-term impact on growth.

Meanwhile, nearly all chief economists (94%) expect the inflation rate to increase under Trump.