Trump's going to Davos where 'America First' will be his buzzword - CNBC News

15/1/2018

Trump's going to Davos where 'America First' will be his buzzword

Holly Ellyatt | @HollyEllyatt Published 21 Hours Ago

CNBC.com

All eyes will be on President Donald Trump at the World Economic Forum (WEF) in Davos, Switzerland, this month with analysts predicting he will use the meeting as a chance to show off his economic and policy successes so far in office.

Trump's attendance at the 2018 Forum, announced in early January, raised eyebrows at the time as the president has roundly criticized elites such as the rich and powerful that attend Davos. His former advisor Steve Bannon said during Trump's election campaign that working people were "tired of being dictated to by what we call the party of Davos."

Trump will be the first sitting present to visit the meeting in the Alps since Bill Clinton in 2000. Recent presidents have avoided the meeting, perhaps to avoid giving the wrong impression to voters by rubbing shoulders with the elite.

John Raines, head of political risk at IHS Markit, told CNBC ahead of the Forum that Trump's decision to attend Davos was "interesting", given his criticism of the meeting.

"Here's a guy who has really complained about the Davos set for quite some time, (and) during (his election) campaign," Raines said. "He's come out and said that he disagrees with the agenda, he disagrees with globalization, free trade and here he is going right into the vortex."

Trump preps for Davos as concerns loom over welfare reform and infrastructure projects

"But it kind of goes with his personality in which he gets to have this shindig with the corporate elite and he also gets to point to some of his economic and policy successes," he added.

'America First'

Davos' theme this year is "creating a shared future in a fractured world."

The Forum's organizers hope that the 2,500 or so attendees — ranging from heads of state to CEOs, business leaders and policymakers — can discuss and agree ways to resolve some of the world's most pressing problems such as inequality, climate change and poverty — not subjects that Trump has put top of his agenda while in power.

Rather, Trump's first year in office has been characterized by shock and awe, although not always in a good way.

Yet, while he has caused controversy over his policy pronouncements over Muslims and immigrants, and U-turns in foreign policy (such as the embassy relocation in Israel and backtrack over the nuclear deal for Iran), he has also garnered praise among the Republican party for an overhaul of the U.S. tax system and among his supporters for implementing an "America First" manifesto.

U.S. President Donald Trump waves to members of the media before boarding Marine One following his first medical exam at Walter Reed National Military Medical Center in Besthesda, Maryland, U.S., on Friday, Jan. 12, 2018.

Chip Somodevilla/Pool via Bloomberg

U.S. President Donald Trump waves to members of the media before boarding Marine One following his first medical exam at Walter Reed National Military Medical Center in Besthesda, Maryland, U.S., on Friday, Jan. 12, 2018.

White House Press Secretary Sarah Sanders has already signaled that Trump will use his attendance at Davos "to advance his America First agenda with world leaders," according to a statement, that added: "At this year's World Economic Forum, the president looks forward to promoting his policies to strengthen American businesses, American industries, and American workers."

IHS Market's Raines believed that Trump would make the most of Davos to trumpet his achievements: "He can say the stock market is hitting new highs on a daily basis, and on top of that the U.S. growth rate's continuing to pick up so I think he gets to go there and defend his policies while he gets to hang out with the people he likes," he said.

"I don't think he's going to go into Davos saying, 'Look there's a social contract we need to uphold.' I think he goes in saying, 'Hey listen, follow me, I have a recipe for success and you guys need to follow suit.'"

What will Davos make of Trump?

It will be interesting to see how Trump is received in Davos. While U.S. businesses have largely lauded his overhaul of the taxation system because it lowered the corporate tax rate from 35 percent to 21 percent, policy makers — even those to the right of the political spectrum — have been surprised by some of Trump's more controversial moves.

These include acts such as a travel ban targeting several Muslim-majority countries and trying to rescind the Deferred Action for Childhood Arrivals (DACA) program, which shielded children brought to the United States illegally by their parents from being deported.

In Europe too, Trump's brash leadership style and policies have not found favor with the continent's more conciliatory and collaborative approach to politics and trade policies.

Carl Weinberg, chief economist and managing director at High Frequency Economics, told CNBC ahead of the meeting that Trump could prompt European leaders to continue to pivot away from the U.S.

U.S. President Donald Trump and German Chancellor Angela Merkel

"Let's look at what the reaction might be to the president to Davos," Weinberg said. "So he comes and lays out this American agenda — well, the last time he came to Europe (German Chancellor Angela) Merkel stepped up and said, 'Well, we don't really like what we're hearing from the U.S. so it's time for us to pivot our relationships perhaps away from the U.S. towards China and Asia'."

However, Weinberg noted that Davos 2018 could be Trump's chance to refute the notion that the U.S. was turning its back on the world. "This could be his chance to come out with his core view which is 'We don't object to globalism but we want it to be on an equal playing field.'"

One year of Trump

The WEF meeting comes as the one-year anniversary of Trump in power with his unorthodox style of government and communication having made waves the world over. This year's WEF is predicated on the idea that the world is "fractured" and its audience will be looking back at Trump's first year in office and what effect he has had on the world so far.

Speaking to CNBC ahead of Davos, John Studzinski, vice-chairman of Blackstone, said Trump's presidency had so far been like "a tale of two cities."

"You have to think of domestic Trump and you have to think of international or foreign policy Trump," he told CNBC in December ahead of Davos 2018.

"On domestic Trump, the stock market has continued to be robust, his laissez-faire attitude with respect to regulation has been seen as a very positive indicator and markets have responded very well to that.

"On the other hand, he inherited a global shift in the hegemony of America as the center of the world order. That is shifting and, with President Xi Jinping's speech in Davos 2017, has really shifted to China as potentially a greater source of stability in the world."

It would be hard to be indifferent to Trump's first year in office, with the president polarizing his supporters and detractors at a domestic and global level even further.

Trump's most controversial decisions so far have been perhaps the move to ban citizens from certain Muslim countries from being able to travel to the U.S., a move which met with protests, as well as his response to the violencein Charlottesville, North Carolina.

In terms of the U.S.' diplomatic relations, while the president has sought closer ties with countries like China, Israel and Saudi Arabia, others — notably Iran and North Korea — have felt the cold shoulder of the U.S.' new direction in terms of foreign policy.

All that without mention of an investigation rumbling on in the background probing allegations of collusion between Trump's team and Russia in a bid to influence the U.S. election.

World 'more dangerous' since Trump?

Mark Malloch Brown, former United Nations deputy secretary-general, told CNBC ahead of Davos 2018 that the world was a more dangerous place now because of Trump, especially with regards to his interventions in North Korea and the Middle East.

"Trump the disruptor was welcome because there had been no solution in the Middle East or North Korea for years. But Trump the guy that just has no policy depth, the recklessness, the temper on him and unpredictability … So net-net, he's making the world a more dangerous place," Malloch Brown said.

Despite Trump's fraught forays into foreign relations, he has made some progress in terms of his election pledges at home, notable having just implemented an overhaul of the U.S. tax system that, although it's set to cost $1.5 trillion in terms of increasing the deficit, could — over the long-term — boost growth.

U.S. President Donald Trump sits at his desk while signing the $1.5 trillion tax overhaul plan in the Oval Office of the White House in Washington, U.S., Dec. 22, 2017.

Jonathan Ernst | Reuters

U.S. President Donald Trump sits at his desk while signing the $1.5 trillion tax overhaul plan in the Oval Office of the White House in Washington, U.S., Dec. 22, 2017.

Malloch Brown told CNBC that Trump's policies had not yet helped his core group of supporters and that they could de-polarize the U.S.

"Some tokenist things like re-opening a coal mine or the promise to cut immigration — these are acts of theater intended to appeal to that constituency, but they're not enduring economic solutions to that group's problems," he said.

"It's unlikely that the current division in the U.S. will end and it will, like the Davos title, likely remain fractured. But, if anything, those fractures will deepen precisely because the Trump presidency won't likely deliver solutions."

As such, Malloch Brown believed that "clouds were gathering" for Trump.

"Tax reform is a potential great win for him even if there are many economists who doubt its long-term effectiveness given the widening deficit," he said. "But clouds are gathering for him beyond that in terms of the continued disruptive and rather unpredictable foreign policy… activities which leave the world in a sense of great uncertainty."