Are Trumps policies the right prescription for the sickness of a fractured world?
My bet was that Trump would seek to contrast the speech with the one that Chinese President Xi Jinping gave at Davos one year ago in which he staked a claim to Chinese leadership and attacked protectionism, and remind his audience that he has made many of them a lot of money because of US tax reform and a rising stock market.
Indeed, he opened his speech by saying that he was there to represent the interests of the American people and argued passionately that this is “the perfect time to bring your business, your jobs, and your investments to the United States”.
Trump took full credit for many of the trends, including the steady reduction of unemployment and economic growth that were set in train by his predecessor and returned repeatedly to the benefits that his tax changes would deliver. Unsurprisingly, he did not mention the one trillion+ dollars his tax plan would add to the deficit and how future generations would have to shoulder the debt burden.
The vast majority of the tax benefit will flow not only to the 1% but to the 0.1%, fully represented here at Davos. Trump argued that the tax bill is expected to raise the average household income; others have responded, equally fervently, that it will in fact aggravate the inequalities that are powering populism and creating the fractures that this meeting expressly hopes to repair.
The world needs US leadership, along with multi-lateral institutions and global allies. The challenges we face, from climate change to economic growth, require a global response. With the US withdrawing from so many trade agreements and firing clear warning shots about what Trump considers to be unfair or exploitative practices, many of the corporate titans while agreeing that the US remains a great place to do business, are also questioning whether Trump’s policies of unilateralism, especially in trade, and promoting division, really are the right prescription for the sickness of a fractured world.