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Davos

Before Donald Trump arrives, US officials get busy telling Davos how ‘America First’ can coexist with free trade

Europeans lead will attempt to grab the spotlight at Davos after the leaders of India and Canada rallied on Tuesday against Trump’s protectionist stance

PUBLISHED : Wednesday, 24 January, 2018, 8:52pm
UPDATED : Thursday, 25 January, 2018, 6:03am

The United States insisted on Wednesday it was not turning its back on the world as President Donald Trump prepared to sell his “America First” message to sceptical fellow leaders at the World Economic Forum in Davos.

French President Emmanuel Macron and German Chancellor Angela Merkel spent the day at Davos defending the liberal international order after a year-long assault by the US president, with Merkel warning of the “populist poison” of protectionism and Macron calling on the EU to band together.

Merkel’s remark in particular seemed to be directed at Trump, who - fresh from angering China and South Korea with new tariffs on solar panels and large washing machines - will close the annual conference with a speech promoting his ‘America First’ order on Friday.

Top US officials said his trip was intended to defend US interests while also promoting international partnerships.

“This is about an America First agenda but America First does mean working with the rest of the world,” Treasury Secretary Steven Mnuchin told reporters at the gathering of heads of government, tycoons, campaigners and celebrities.

“It just means that President Trump is looking out for American interests, no different than other leaders look out for their own.”

This is about an America First agenda but America First does mean working with the rest of the world
Treasury Secretary Steven Mnuchin

US Commerce Secretary Wilbur Ross, also in Davos, staunchly defended Monday’s tariffs announcement and said Washington would not flinch from reprisals against countries that flout the rules.

“Trade wars are fought every single day … and unfortunately every single day there are various parties violating the rules and trying to take unfair advantage,” Ross said. “Trade wars have been in place for quite a little while. The difference is the US troops are now coming to the ramparts.”

While tariffs are anathema to the business elite in Davos, many delegates have welcomed Trump’s controversial tax reform which is bringing the headline rate of US corporate tax down to 21 per cent, significantly undercutting many countries in Europe.

Mnuchin, however, said the United States was not bent on a “race to the bottom” on tax rates by luring away foreign investors unfairly.

While Trump intends to come to Davos as salesman-in-chief for US economic interests, Macron is equally determined to defend a global system shaped by mutually agreed rules – and also to uphold gender equality, in contrast to the US president’s controversy-laden record on women.

Macron arrived in the Swiss ski resort after rallying some 140 chief executives at a meeting in the Palace of Versailles on Monday in his drive for a “renaissance” in French and world business. Many of the bosses are in Davos too.

German Chancellor Angela Merkel, on the other hand, needs to settle her own leadership problems before taking the fight to Trump. She was late in confirming that she would attend Davos, tearing herself away from efforts to form a new government after an election setback in September.

“Merkel doesn’t have a government yet. Macron is the new deal,” said one prominent business delegate at Davos, PR company boss Richard Edelman.

For German economic daily Handelsblatt, Merkel is heading to Davos with her hands “tied”.

It said she will be obliged to “stay in the shadow of Macron and Trump”.

The Europeans will grab the spotlight at Davos after the leaders of India and Canada rallied on Tuesday against Trump’s protectionist stance.

Trade wars have been in place for quite a little while. The difference is the US troops are now coming to the ramparts
US Commerce Secretary Wilbur Ross

Canadian premier Justin Trudeau celebrated the announcement of a new Asia-Pacific trade agreement among 11 countries to replace one that Trump pulled out of last year.

Several other European leaders were also scheduled to speak on Wednesday, at the start of a potentially turbulent year for the continent.

Italy’s Prime Minister Paolo Gentiloni will give an address, less than two months ahead of general elections in his country.

Greece’s left-wing Prime Minister Alexis Tsipras, whose country is looking to emerge from its international bailout programme, joins a panel discussion on “Stabilising the Mediterranean”.

And there was a speech by King Felipe VI of Spain, which is grappling with a political crisis over independence demands in the Catalonia region.

Delegates will have to wait until Thursday to hear from British Prime Minister Theresa May, who is struggling with questions over the future of Britain’s trade relations as it prepares to leave the European Union. But British International Trade Secretary Liam Fox said he was undeterred by Macron’s charm offensive, and said the Davos meetings were the perfect opportunity to press London’s case.

He said: “There is a strong willingness to do business with the UK, but then who doesn’t want to get access to the world’s fifth biggest economy?”