Trump’s new economic war

Donald Trump’s television picture rose to the head of David ski resort on Thursday, embodying the great influence that the new president left in the oval office just a few days later.

The prime ministers, business leaders and chairman of the European Central Bank were queuing to see that he will perform at the World Economic Forum after returning to the White House in front of the world audience. One of those present joked about the bringing of popcorn for the show.

Trump did not rebuild, causing nervous laughter, because he presented a number of requirements and ultimatums both the allies and competitors.

Saudi Arabia and other producers must reduce oil prices, world central banks must reduce interest rates, and foreign companies must increase investments in US factories, otherwise customs duties will be applied. The EU, which has been particularly immorinated, must stop competing with large American technology companies.

“We are going to demand respect from other nations,” he said. His predecessor “allowed other countries to use the US. We can no longer allow this to happen. ”

Trump’s requirements were risen in office during the first week of office, when the President started blitz-Krig, which was aimed not only to reorganize the state and trade priority of America. Up to 25% customs duties can be set on Canada and Mexico from February 1, roughing the trade transaction, which Trump itself negotiated in his first term.

China can be threatened with up to 100 percent of taxes if Beijing does not agree to sell at least 50 percent of Tiktok application to the American company, while the EU is told to buy more American oil if he wants to avoid customs duties. . Emphasizing the new American unilateral, Trump took the United States from the World Health Organization, as it went out of the Paris Climate Agreement for the second time.

Surprisingly, Trump has acquired an incomprehensible provision of 90 years in the US Tax Code for threatening. doubling tax rates for foreign citizens And companies, if it was considered that their homeland has set “discriminatory” taxes on American multinational companies.

This proposal throws a “hand grenade” on international tax policy, says Nils Johannesen, the director of the Business Taxation Center of Oxford University of Said Business School. This step implies a determination to “form the tax policy of other countries through coercive, not cooperation,” he said.

The programs revealed by the new president this week raise the ghost of a multilateral economic war, as Trump uses the strength of the American economy to restore the international order.

The main question is that investors and policy makers say that it means a more intensive approach to transaction, which has been observed in the first time of Trump or the transition to the White House, which is unreserved to international law. Destroys and bothering with restrictions. intimidates foreign governments and businesses.

“He arms everything, trade, taxes and energy. I’m worried that finance will also be armed, “says the head of one of the world’s largest sovereign funds. “Most people bet, he thinks about the stock market, it is the only verification. That’s what he said he wanted to be peacemaker. “

In Davos, the leading leaders of the United States They wanted to rejoice in the Trump’s agenda, assuming that there is little anxiety in the corporate sector to sever the global procedure based on the rules.

Tariffs “Economic Tool. End, “JMMori Diamond said in an interview with CNBC this week in an interview with CNBC. “If it’s a little inflation, it’s good for national security, so it is. Go through it. “

The US stock market grew this week as investors digested the prospect of mitigating the regulations of banks and high-tech companies, as well as the mass announcement. Infrastructure project of artificial intelligence worth $ 100 billion launched by Openai and SoftBank. At the end of the week (in New York on Friday) The S & P 500 index increased by 1.8%.

“In anonymously, people speak with executive directors and say that they are all very important,” says Mahmoud Pradhan, the head of the global macro department of the Amund Investment Institute.

“If I ask myself what animal spirits justifies, banking is real, and the prospect of crowding corporate taxes is real.”

However, the threat of expansion of conflicts related to commercial barriers and tax policy outside the United States is burdened by the economic prospects. EU Commissioner for Economic Affairs Valdis Dombrovskis says that the breakdown of world trade will be particularly worrying about economies like Europe, where trade is more than one-fifth of GDP.

He quotes the IMF assessments that show that extremely geo-economic fragmenttion In the medium term, trade can destroy 7 percent of the world’s GDP. “If this global economic fragmentation is established, and it has its danger, it will have significant negative economic consequences.”

However, even when they are preparing for customs duties, some European politicians claim that they see possible positive aspects.

“It’s a new environment that is undoubtedly less comfortable for Europe, but which also gives many opportunities,” said Belgian Prime Minister Alexander de Croo. “Europe can show that we have stability, and that you are in a predictable environment where investments can be made.”

European officials also say that they can benefit from other countries with deeper trade connections that can be left out of US markets. “Countries come to us, because they want to diversify the US,” said a high-ranking EU official.

“We must continue to be open, but we should not be naive,” said Carlos Kyerpo, Minister of Economy of Spain. “We must have our companies to compete with equal conditions, equal conditions and equal conditions on others. That’s how it was China. It must be in the case of the United States. “

Although the United States and Europe are protesting against Chinese trade practice, Beijing hurried to present itself as a world-based classification, not its enemy.

Speaking the next day of Trump’s inauguration, China’s Deputy Prime Minister Dean Sogyan claimed that the economic globalization “You lose, I won,” is not a game with zero money. The world’s largest countries should “give an example,” he said, praising international bodies, including the World Trade Organization and the United Nations.

The irony that China presents an example of a free trade, while Trump tries to extort concessions from his close allies through a rude economic force, and did not lose Dince’s speech to Davos.

Despite the torrent of events And the statements made by the White House this week, most of the world’s policy makers show an expectant approach to the aggressive transactionalism of Trump, and not in a hurry to conclude on long-term consequences. World Economic system.

“Why put my cards on the table before he?” He says a high-ranking EU official.

British Business Secretary Jonathan Reynolds admits that “there are many issues” about the president’s approach. “We are talking about leverage over talks. We are talking about increasing income in terms of tariffs. ” He says that the United Kingdom will continue to challenge “much more open for the global trade economy.”

However, there is no doubt that Trump is a significant escalation of how he trade as a weapon as a weapon.

“Those around Trump have time to create a systematic, methodological approach to protectionist trading policy,” said Ali Renison, a former employee of the United Kingdom Trading Department. He says that the approach will be the creation of the materials of the “evidence” case against the countries, and then to extort concessions in the fields of economic and foreign policy.

The question remains how far is the trump ready to go. The risk of violating the rules based on the Beagan’s Analytical Center, Geromin Zetelmayer, is a complete breakup of diplomatic and legal routes to regulate international disputes.

If Trump out of a wider range of international circles, such as WTO or IMF warns, then the agreements that help to manage the world economy can be “significantly destroyed.”

The extreme case, adds, is that “they really do Putin,” it is, violating the sanctity of international borders. The violent control of the Greenland or Panama canal, as Trump threatened, will mean “Redistribution of Jungle Law.”

Michael Strain, Director of Economic Policy of the American Enterprise Institute Analytical Center, is asking that Trump will change the “fundamental forces” that promote world economic integration, and whether the president even wants to do so. But no matter how he says, uncertainty about his real intentions “makes plans for business, it has a freezing effect on investments and creates tension with our allies.”

Certain caution, not to be given to the infinite supporters of Trump’s threats or capitalism, as his agenda was so inappropriate.

“What we see is a huge amount of American arrogance,” says Arans Gonzalez, the dean of the School of International Relations of the PARIS INTERNATIONAL COMMUNITY. “We are blinded by the intensity of all the issues on the table and the conviction of Trump. But we do not look at the contradictions. Looks like we’re all using orange drugs. “

Additional reports by Hariatet Agnew in Davos and Peter Foster in London

The reflection of the data by Nose Frie