Donald Trump’s speech is awaited with excitement among European Union leaders, as the new president has threatened to raise customs duties on products imported to the United States.
President of the United States Donald Trump will speak Thursday evening at the World Economic Forum in Davos.
It will be Trump’s first major speech since taking office on Monday. Trump will participate in the meeting remotely.
The content of the speech has not been disclosed.
Professor of economic history at the University of Helsinki Jari Eloranta anticipates that Trump will address key US economic policy themes in his speech: tariffs and world trade conditions, which the new US president considers unfair.
– In the speech, you will certainly hear a lot of Trump’s typical nationalist America first rhetoric.
Eloranta also considers Trump’s ambitious artificial intelligence project as one possible theme.
This week, Trump announced a half-billion-dollar private-sector investment in artificial intelligence. Trump’s billionaire ally Elon Musk considered the project unrealistic.
Trump threatens tariffs
Trump plans to impose tariffs on at least China, Mexico and Canada, but also on the European Union. Trump justified the tariffs on Tuesday, saying that the trade imbalance between the US and the EU needed to be changed.
According to Eloranta, Trump’s tariff threats are related to his simplified view of the trade balance.
– According to Trump, the US trade balance is in deficit with some countries, and he considers it problematic. Trump thinks this imbalance puts US exporting companies at a disadvantage.
According to Eloranta, Trump mistakenly believes that with the help of tariffs, the United States could get additional revenue to cover the budget deficit, when in reality the costs arising from the tariffs are paid by consumers.
This is how the EU reacted to the customs talks
On Wednesday, the French president Emmanuel Macron and the Chancellor of Germany Olaf Scholz emphasized in their meeting Europe’s strength and unity in the face of Trump’s tariff threats. According to the heads of state, it is clear that Trump is a challenge for the EU.
– Our position is clear. Europe is a large economic area with about 450 million citizens. We are strong. We like one. Europe is not going to hide and dodge, Scholz said.
President of the European Commission Ursula von der Leyen quoth, that the EU is ready to negotiate with Trump. However, he emphasized that the EU will defend its interests.
In addition to tariffs, there is tension in the EU about what Trump says about supporting Ukraine.
Eloranta describes the EU leaders’ reactions as cautious.
– It seems that the EU leaders do not want to anger the volatile head of state or give him reasons for punitive measures.
According to Eloranta, some of Trump’s threats regarding tariffs are rhetoric, but some are ones that Trump could implement.
According to the professor, Trump is likely to pay attention to the tariffs on BRICS countries, because according to Trump’s view, BRICS threatens the dominance of the dollar.
NATO’s budget is one possible theme
Eloranta says that Trump will most likely discuss the EU in connection with NATO’s defense spending.
President Alexander Stubb assessed on Tuesday that what Trump says about increasing NATO’s defense spending is interesting from Finland’s point of view.
Trump has suggested that NATO members should increase their defense spending to five percent of GDP.