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President Donald Trump on Thursday delivered his central message to businesses around the world: build in America or face the consequences.
“My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth,” Trump said as he called into a conference of global political and business leaders at the World Economic Forum in Davos, Switzerland.
“But if you don’t make your product in America, which is your prerogative, then very simply, you will have to pay a tariff,” he added in his first address on the international stage since his inauguration on Monday.
Trump has made tariffs a cornerstone of his economic policy, often pointing to more than a century earlier when the U.S. relied on tariffs to raise revenue. In the past, he’s even floated replacing the federal income tax with tariffs, although that idea has taken a backseat.
Trump has threatened universal tariffs of between 10% and 20% on all imports, although he said Monday that “we’re not ready for that just yet.” On Wednesday, he threatened to issue new tariffs and sanctions on Russia unless President Vladimir Putin strikes a deal to end the country’s war against Ukraine.
After winning the presidential election, Trump threatened to hit China, Canada, countries in the BRICS geopolitical coalition, and the European Union with varying tariffs unless they complied with his various demands. On Monday, Trump said tariffs of 25% would be placed on all Canadian and Mexican imports as soon as Feb. 1, saying they failed to meet his demands.
And as he set his sights on acquiring the Panama Canal, buying Greenland from Denmark, and making Canada a U.S. state, Trump has refused to rule out using tariffs as leverage.
“The Panama Canal belongs to Panama. It was not a gift,” President Jose Raul Mulino Quintero declared during a panel in Davos earlier this week, rejecting Trump’s suggestions about taking control of the waterway.
As part of the WEF’s “special address” with the president, he took questions from some of the biggest names in business and politics. Participants included WEF chief executive Børge Brende and founder Klaus Schwab, along with Blackstone’s (BX+1.06%) Stephen Schwarzman, Bank of America’s (BAC+1.45%) Brian Moynihan, the CEO of French energy giant TotalEnergies (TTE+1.29%) Patrick Pouyanné, and Ana Botín, the CEO of Spain’s Banco Santander (SAN+3.63%).
When asked by Moynihan about his flurry of executive actions over the past few days, Trump touted his plans to pass corporate tax cuts and a tax deduction. Congress is expected to vote later this year on whether to extend his 2017 Tax Cuts and Jobs Act, which will expire in 2026.
“So we’re going to bring [the corporate tax rate] down to 15% if you make your product in the U.S.A.,” Trump said. “That’s going to create a tremendous buzz.”