President Donald Trump used an appearance before high-profile government and business leaders in Davos, Switzerland, to foreshadow broader tariff actions and accuse trade partners of taking advantage of the U.S.
“My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth,” Trump told attendees at the World Economic Forum on Thursday in a virtual speech. “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.”
These tariffs, Trump claimed, could generate trillions of dollars in additional revenue.
Since taking office, the president has suggested Canada and Mexico could face new 25% tariffs on Feb. 1 and said his administration is weighing a new 10% tariff on China that could kick in the same day. On the campaign trail, Trump also floated a universal tariff of between 10-20% applied to all U.S. imports.
“We just want to be treated fairly with other nations,” Trump added, charging that there’s “hardly a nation in the world” that has not “taken advantage of the U.S.”
Trump made prioritizing reciprocity in U.S. trade relations a pillar of his economic message during the presidential campaign and has frequently singled out some of the U.S.’ largest trading partners for what he sees as unfair trade practices.
In a Q&A session following Trump’s remarks, the president reiterated his dissatisfaction at the scale of the U.S. trade deficits and trade relations with key economic partners, including in the agriculture sector.
“The [European Union] treats us very, very unfairly,” Trump said. “They essentially don’t take our farm products, and they don't take our cars,” Trump charged, adding that the U.S. records an annual trade deficit with the bloc above $100 billion.
“We're going to do something about it,” Trump said. Before his inauguration, Trump threatened the EU with new tariffs unless the bloc scales up its U.S. oil and gas purchases.
The U.S.’ northern neighbor was also in the crosshairs again. Canadian officials have stressed that they are ready to retaliate to any new tariffs, including by imposing export taxes on Canadian oil and gas, Canada’s trade minister told CNBC earlier this month.
Canada accounts for around half of U.S. oil imports and more than 90% of natural gas imports, according to data from the Canadian Association of Energy Producers and the Canadian Energy Center.
Trump, however, challenged the notion that the U.S. is reliant on Canadian imports in his comments on Thursday.
“We don't need their lumber because we have our own forests,” he said. “We don't need their oil and gas. We have more than anybody.”
The World Economic Forum, an annual meeting in Davos, brings together business executives and policymakers for a slate of discussions and panel events, and Trump’s tariff threats have loomed large in the programming this year, as global industries brace for new trade frictions. In a panel discussion on Wednesday, France’s trade minister, Laurent Saint-Martin, argued Trump’s return to the White House should be a “wake-up call” for EU leaders and pushed for the bloc to bolster trade ties with partners in Southeast Asia and Latin America.
During a panel Thursday morning, World Trade Organization Director-General Ngozi Okonjo-Iweala appealed for cool heads in the event of tariff hikes.
Tit-for-tat escalations, Okonjo-Iweala warned, could inflict “catastrophic” economic losses.
"We are very much saying to our members at the WTO: you have other avenues. Even if a tariff is levied, please keep calm, don't wake up and -- without without the necessary groundwork -- levy your own," she said.
