Donald Trump lands in Davos tomorrow to join thousands of of global leaders and CEOs at the the World Economic Forum. His massive advance team arrived early, though, and for just a few hours in the Swiss town, the world saw what the administration would look like without its current president.
Today, there was none of the usual chaos or controversy. Instead, Trump’s cabinet secretaries and other advisors spent the day systematically remaking Trump’s “America First” message, attempting to translate the president’s fiery, sometimes racist rhetoric into economic and trade policies that won’t alienate US allies or decimate the agriculture industry.
And while the vision they laid out departs from US trade norms, it does not represent the radical shift to populism that Trump has espoused.
The weak dollar is good
The US is “open for business,” treasury secretary Steven Mnuchin told reporters in a morning press conference. “We absolutely believe in free and fair trade with anyone who wants to trade with us on a reciprocal basis,” he said. “We’re looking to increase exports and make sure the US’s opportunities are equal to other people’s opportunities in the US,” he said.
In this quest, the weak US dollar, which fell nearly 10% in 2017, is actually a strength because it makes US exports more attractive, he argued. “A weaker dollar is good for US as it is related to trade.”
Mnuchin’s remarks sent the dollar to a three-year low.
The case for remaking global trade
In recent days, the US has upped tariffs on imported solar panels and washing machines, a move that threatens to kick off a trade war and hurt US jobs. Speaking at two different events at Davos, commerce secretary Wilbur Ross seemed to relish a trade war, saying “US troops are coming to the ramparts.”
He couched recent tariff changes as just a first step in a major overhaul of global trade rules to create a “fair system.”
“If our companies, in a fair fight, can’t compete and win, that’s okay, that’s capitalism.” What’s unfair is for them is to “have to compete against companies that don’t make a profit, and don’t have to make a profit,” and grow despite lack of demand.
Ross was likely referring to the US steel industry, which has been decimated by a flood of cheap Chinese steel, made by state-backed companies rushing to meet Beijing’s artificial economic targets.
Market access should be equal across the globe, Ross argued. Rather than the US charging a 2.5% tariff on auto imports while Europe charges 10% and China 25%, they should be the same. “If everyone charged the same tariff, or no tariff, we’d be happy to take our chance,” Ross said.
Soft power returns
One unexpected official accompanying Trump is Mark Green, the administrator of USAID, the aid agency founded by John F. Kennedy to win hearts and minds in undeveloped countries. Trump once proposed eliminating the program entirely, while his daughter Ivanka proposed starting a “women’s empowerment fund” that fund many of the same projects.
But USAID endures, and Green is at Davos making announcements: USAID has started the “Smart Communities Coalition,” a partnership with Mastercard and other corporations, to bring internet and electricity to “refugees and host communities.” Secretary of state Rex Tillerson arrives tomorrow.
A weak point came during a panel on US foreign policy, when Trump appointees and a congressman broadcast hagiographic sentiments that have become a feature of Trump’s public appearances at home.
“Davos should feel very flattered that he has chosen this as a forum,” US transportation secretary Elaine Chao told the less-than-half full room, to dead silence. “Those who don’t want to listen to him can leave.”
The biggest problem with this new approach to discussing US trade is simply that the president lands tomorrow. The closest thing to the complex, multilateral trade agreements that Ross seems to be suggesting, after all, is the TPP—which Trump campaigned against, and withdrew the US from as soon as he took office.
Doubts about the Trump administration’s ability to negotiate any sort of trade agreement, much less one that covers the entire world, will endure in part because of the mercurial president.
When discussing the benefits of a weaker dollar, an earlier version of this article mistakenly said “imports” when it should have said “exports” (obviously).