President Trump travels to a gilded economic conference in Switzerland on Thursday on a mission to sell American business to wealthy global investors, buoyed by the surging U.S. economy but facing fresh concerns about his trade policy, which includes new tariffs on certain foreign-made products.
The president’s visit to the World Economic Forum in Davos, on the heels of his corporate tax cuts that are spurring U.S. business expansion and better worker benefits, gives Mr. Trump an opportunity to deliver a giant “I told you so” to an audience of European elites who sneered at his “America first” agenda on his first official trip to the Continent last spring.
“He’s going to go there vindicated,” said former White House adviser Sebastian Gorka. “He’s sending a very clear message: America is back, American leadership is back and national sovereignty in general is good.”
The president’s attendance at the exclusive Alpine conference, where billionaires rub elbows with globalists who champion the Paris climate agreement and other multilateral pacts, runs counter to his populist campaign rhetoric. Former chief strategist Steve Bannon said during the campaign that American workers were “tired of being dictated to by what we call the ‘party of Davos.’”
Chief White House economic director Gary Cohn said there is no contradiction in Mr. Trump’s attendance at a forum he once derided.
“‘America first’ is not America alone,” Mr. Cohn said. “We’re part of a world economy. He is going to talk to world leaders about making sure we all respect each other. And if we live in a world where there are not artificial barriers, we will all grow and we will all help each other grow.”
Said Mr. Gorka, “If you believe in representative government and free markets, sovereign nations exercising their own interests within that dynamic is good for international stability. All those people with wishful thinking who are expecting him to somehow ‘cave’ and give out some kind of globalist message will be sorely surprised.”
At a White House meeting with U.S. mayors Wednesday, the president said he will tell global corporate leaders that America is open for business. He said the trend of companies moving back to the U.S. already has begun.
“I’m going to say, ‘Come into the United States; you have plenty of money,’” Mr. Trump said. “But I don’t think I have to go, because they’re coming back at a very, very fast clip.”
Mr. Trump’s attendance at the conference, the first by a U.S. president since Bill Clinton in 2000, was the talk of the gathering even before his arrival. Italian Prime Minister Paolo Gentiloni, referring to tariffs that Mr. Trump slapped this week on imported solar panels and washing machines, told reporters that the president’s protectionist policies threaten global growth.
“Yes, you can defend and protect your citizens, your workers, your companies, but we live in a framework of trade agreements, free trade, international rules, multilateral decisions, and we have to keep this system running,” Mr. Gentiloni said.
German Chancellor Angela Merkel, without mentioning Mr. Trump by name, warned the forum against the “poison” of populism that she said would cause states to become increasingly inward-looking.
“We have to advocate for our multilateral approach,” Ms. Merkel said. “You need to have the patience to find multilateral solutions and not slip into the apparently easier solution of acting in national interests.”
Commerce Secretary Wilbur L. Ross Jr., who was among the Cabinet members arriving at Davos ahead of Mr. Trump, said more U.S. trade restrictions are likely.
“Trade wars are fought every single day,” Mr. Ross said. “The difference is the U.S. troops are now coming to the ramparts.”
But Mr. Ross denied that the tariffs, which targeted manufacturers mainly in China and in South Korea, were protectionist measures.
“I don’t think adhering to rules is protectionism,” he said. “Unfortunately, every single day there are also various parties violating the rules and trying to take unfair advantage.”
He added, “We don’t intend to abrogate leadership. Leadership is different from being a sucker and being a patsy.”
Treasury Secretary Steven T. Mnuchin said the tariffs were imposed in response to trading partners’ “inappropriate behavior.”
“Many countries are good at the rhetoric of free trade, but in fact actually practice extreme protectionism,” Mr. Mnuchin said.
Mr. Trump is still deeply unpopular in many European countries. A Gallup survey this month found that approval ratings of American leadership fell last year by 44 percentage points in Belgium, 42 points in Norway, 28 points in France, 26 points in the United Kingdom, 21 points in Germany and 14 points in Italy.
Nile Gardiner, an analyst on U.S.-European relations at The Heritage Foundation, said the condescension that Mr. Trump encountered during his visit to NATO headquarters in Belgium last spring “is replaced by a grudging acknowledgment from many European leaders that Trump has been very successful on many fronts over the last year.”
“Donald Trump is going into the lion’s den at Davos, but he will be presenting a compelling message that free markets and economic freedom work,” said Mr. Gardiner, director of the Margaret Thatcher Center for Freedom. “Trump will enter the Davos forum with a formidable record of economic success.”
Transportation Secretary Elaine L. Chao said the gathering should expect an unapologetic message of American prosperity from Mr. Trump.
“Davos should feel very flattered that he has chosen this as a forum,” she said. “Those who don’t want to listen to him can leave.”
Some corporate leaders at Davos said global economic optimism is high, fueled by the U.S. resurgence that is being credited to the tax cuts approved in December and to Mr. Trump’s assault on regulation.
Gary Pinkus, managing partner for North America at management consultancy McKinsey & Co., told Bloomberg News that the mood at a dinner he hosted for corporate leaders at Davos this week was, “from an economic point of view, just shy of jubilant.”
The International Monetary Fund this week predicted that global growth would accelerate to its fastest pace in seven years as the U.S. tax cuts spur business investments.
This week alone, Verizon Communications Inc., Starbucks Corp., the Walt Disney Co. and JPMorgan Chase & Co. announced bonuses or pay raises for hundreds of thousands of workers, as well as major expansion plans.
“The good news about tax reform benefits is rolling in almost faster than I can talk about it,” said Senate Majority Leader Mitch McConnell, Kentucky Republican.
That kind of good news makes Mr. Trump’s sales job easier. Mr. Gardiner said Mr. Trump has experience dealing with the wealthy elites who attend Davos and that his policies have helped increase their bottom lines in the past year.
“While Trump is not necessarily a hugely popular figure internationally, he is increasingly respected as someone who delivers on his promises and as somebody who has a very impressive economic track record,” Mr. Gardiner said. “That’s what Davos is all about: economics. The Trump presidency has been a massive boost for the global economy. Most of those attending the summit will have benefited from Trump’s presidency.”
Mr. Trump will deliver a major speech at the conference on Friday, and Mr. Gardiner said the president would to well to steer clear of the subject of tariffs.
“If he gets bogged down by discussions over protectionism, which will only harm the U.S. economy, that will weaken his overall message about his free market reforms,” Mr. Gardiner said. “The issue of trade is a real minefield for Donald Trump. It’s important that the Trump administration project a message of clarity on free trade, which is that free trade is good for the global economy. If he veers away from that, I think it’s going to really undercut the United States internationally. Imposing tariffs isn’t going to help the U.S. economy.”
But Mr. Gorka, who left the White House last summer, said Mr. Trump can defend the tariffs as needed corrective action in an unfair trading system exploited by countries such as China.
“What the administration inherited wasn’t a free trade system,” he said. “It was called a free trade system, in which pariah states like China were exploiting the cloak of free trade … whether it was undervaluing their currency or deceptive trade arrangements.”
Mr. Trump, he said, is “redressing through half-measures like tariffs the imbalance created by a fake fair trade system. He wants free trade, but he wants fair trade.”