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2 months ago
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Donald Trump has signalled that all imports into the US will face tariffs, as he set out more details of his economic policy in an online address to the World Economic Forum in Davos.
In a typically blustering speech, the new president said he intended to cut business taxes to make them “among the lowest taxes of any nation on Earth”, to encourage manufacturers to locate in the US.
He continued: “But 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, but a tariff – which will direct hundreds of billions of dollars, and even trillions of dollars into our treasury to strengthen our economy and pay down debt.”
Trump has previously said he intends to levy tariffs, which are import taxes, on goods from Mexico, Canada and China, and is also considering penalising imports from the EU. But he appeared to suggest tariffs would be applied across the board.
In response to questions from business leaders in Davos, the US president denied his tariff policy could raise prices and contribute to inflation.
“I think it’s been actually bring down inflation. It’s going to bring up jobs. We’re going to have a lot of jobs. We’re going to have a lot of companies moving in,” he said.
Trump also put himself on a collision course with the Federal Reserve by urging it to cut interest rates “immediately” to bolster the US and global economy.
“I’ll demand that interest rates drop immediately. And likewise, they should be dropping all over the world. Interest rates should follow us all over,” he said.
The US central bank is independent of government and its chair, Jerome Powell, has previously insisted he would not resign if Trump asked him to. The new US president has previously criticised the Fed’s governors as “boneheads”.
It reduced interest rates three times last year, but financial markets are expecting less than two cuts this year, with many analysts expecting tariffs to be inflationary. The next Fed meeting is on 29 January and could provoke and early clash with the White House.
Trump also made a series of demands of overseas leaders. He repeated his call for Nato countries to increase defence spending to 5% of gross domestic product, and urged Saudi Arabia and the oil-producing cartel Opec to cut oil prices, claiming this would end the war in Ukraine.
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“You’ve got to bring it down, which, frankly, I’m surprised they didn’t do before the election. That didn’t show a lot of love. Surprised by that,” Trump said. “If the price came down, the Russia, Ukraine war would end immediately.”
He added: “They should have done it long ago. They’re very responsible, actually, to a certain extent, for what’s taking place. Millions of lives are being lost.”
The US president also made a series of false claims, including denying the reality of the climate crisis, and claiming “far more people” had died in Ukraine than had been reported.
Trump also went on a lengthy digression about the benefits of “good, clean coal”, and claimed to have discussed a radical nuclear disarmament deal with Moscow and Beijing in his first presidency.
