President Donald Trump, speaking virtually at the World Economic Forum in Davos, called on OPEC to lower oil prices, linking it to reducing inflation and pressuring Russia over the war in Ukraine. Describing Saudi Arabia’s Crown Prince Mohammed bin Salman as a “fantastic guy,” Trump stated he would be asking the country to “bring down the cost of oil”. He warned of new tariffs aimed at reshoring manufacturing to the U.S., stating, “If you don’t make your product in America… you will have to pay a tariff.”
Trump declared that he will “demand” an immediate reduction in interest rates. This call for lower rates was linked to his assertion about declining oil prices. Trump stated, “With oil prices going down, I’ll demand that interest rates drop immediately.” He extended this demand beyond the United States, suggesting that interest rates “should be dropping all over the world.” Trump’s comments come just days before the Federal Reserve’s first policy meeting of his new administration, scheduled for January 28 and 29. Despite Trump’s demands, there is a widespread expectation among economists that the Fed will maintain current interest rates at this upcoming meeting. This demand for lower interest rates marks Trump’s first critique of the Federal Reserve’s monetary policy since he assumed office just three days ago. It also echoes his past criticisms of the Fed during his first term, when he frequently called for lower rates and criticized rate hikes.
In his remarks, Trump criticized the previous administration’s economic policies and promised a “golden age” for the U.S., emphasizing domestic energy production and reduced government spending. His return to power has stirred mixed reactions, with some business leaders welcoming his tax and regulatory reforms, while others express concerns over tariffs and climate policy reversals.
Trump’s second term policies focus on reshaping global trade dynamics, energy independence, and tough stances on immigration and climate agreements. As world leaders adjust to his presidency, Trump hinted at immediate action, including potential tariffs on China, Mexico, and Canada by Feb. 1.
Trump’s virtual speech focused heavily on trade policy, particularly concerning Canada, Europe, and Mexico. His remarks were characterized by a confrontational tone and threats of tariffs against both allies and adversaries.
European Union. Trump strongly criticized the European Union’s trade practices, accusing them of treating the United States unfairly. He claimed that the EU imposes onerous regulations and undermines U.S. businesses, citing recent antitrust actions against major American tech companies as examples. Trump also mentioned that the EU essentially rejects U.S. agricultural products and automobiles while sending millions of their vehicles to the U.S. The president urged the EU to “speed up their process,” suggesting that European competitiveness is hindered by slow approval processes. He also likened the EU’s value-added taxes to a “non-economic or non-monetary tariff.”
Canada. Trump’s remarks about Canada were particularly pointed. He referred to Canada as “tough to deal with” and made the controversial claim that the U.S. doesn’t need Canadian oil and gas. Trump reiterated his idea of making Canada the 51st US state, suggesting it as an alternative to avoid tariffs. The president announced his intention to impose a 25% tariff on imports from Canada starting Feb. 1. This threat was met with a strong response from Canadian Prime Minister Justin Trudeau, who vowed to implement dollar-for-dollar matching tariffs if necessary.
Mexico. Trump’s stance on Mexico was like that on Canada. He announced plans to impose a 25% tariff on Mexican imports, also starting Feb. 1. The president cited concerns about immigration and drug trafficking as reasons for these potential tariffs.
General trade policy. Trump’s overall message at Davos was a mix of invitations and threats. As noted, he urged global businesses to relocate their operations to the U.S., promoting initiatives aimed at reducing corporate taxes and lowering interest rates. However, he also warned that businesses not embracing this vision of American prosperity would face tariffs. The president claimed that his administration has initiated the largest deregulation effort in history, surpassing even the measures taken during his previous term. He presented a perspective of U.S. prosperity that would benefit the entire globe, stating, “America is back and open for business.”
Trump’s approach to trade policy, as presented at Davos, continues to be characterized by protectionist rhetoric and a willingness to use tariffs as a negotiating tool, despite concerns from economists about the potential negative impacts on economic growth and consumer prices.
Even the company chiefs asking him questions didn’t escape his criticism, with Bank of America CEO Brian Moynihan told to “start opening your bank to conservatives.” Some groups have claimed that they are not able to access banks including Bank of America, and that “is wrong,” Trump said.
On the war in Ukraine, Trump foreign policy hand Ric Grennell chided European leaders for their handling of the war and “warned that efforts to fold the country into the North Atlantic Treaty Organization during peace talks with Russia would run into an American “buzz saw.”
NATO Secretary-General Mark Rutte said that Trump is being absolutely fair to demand that European allies spend more on defense. “He is right of course, that the problem is not the U.S. and the problem is Europe,” Rutte said.