Perhaps sensing the sense of dread that permeated delegates at the World Economic Forum in Davos, Switzerland, US President Donald Trump surprised his critics by reaching out with a sales pitch for the US economy. He clarified that his slogan 'America first' did not imply 'America alone'. He offered the US's friendship and partnership and invited investors to take advantage of a booming economy once again. Although his remarks were undermined by the latest reports that the US economy slowed in the fourth quarter, Trump's well known aversion for multilateral trade pacts was softened by the statement that he could revisit the pan-Pacific trade agreement he rejected soon after taking office. Bilateral trade pacts though received Trump's approval. He reiterated that the US supports free trade but it has to be fair and reciprocal. He condemned predatory behaviours such as theft of intellectual property, industrial subsidies and state-led economic planning. This remark may have been aimed at China, which has benefited hugely from the US market after embracing an export-led capitalist model three decades ago but which is accused of the first two practices in trade and the third is its system of economic management under communist rule. The week before he travelled to Davos to deliver his maiden speech at the Forum, the Trump administration targeted China and South Korea with new tariffs, including 30 percent tariffs on imported solar panels. These are seen as the first unilateral trade restrictions as part of a broader protectionist agenda. Trump underlined the resolve of his administration that the US would no longer turn a blind eye to unfair trade practices.

President Trump was unabashedly promoting US interests in Davos, arguing that every state is entitled to do the same. However, the world is still holding its breath regarding the protectionist, if not isolationist rhetoric that has been coming from Trump since his election campaign and after he assumed office. While the world's biggest economy has no doubt acted as a magnet for the world's exports, investment too has followed in the footsteps of this phenomenon, creating jobs and enriching the US economy. In fact this has been the experience of most developed and developing economies in the last three decades. Conceded that where cheaper imports have hurt US businesses, there may be a case for tariff adjustments, but this should be restricted as far as possible to such clearly established vulnerable sectors and not become the battering ram of raising tariff walls that effectively cut off the US from the world's free trade regime. Having said that, it is noteworthy that Trump's address was met with more than a modicum of relief by the Forum delegates. For one, fears of a similar tongue-lashing to the one Trump delivered at the UN General Assembly last September appeared to be misplaced. There was also relief all round that Trump did not declare a trade war or any other wars. The speech has been described as more consensual than expected, middle-of-the-road, unexciting and rational. That description could be considered a first for Donald Trump! Despite the relief that nothing untoward was to be found in the speech, Trump was listened to in almost complete silence, except when he was roundly booed for once more tilting against his favourite target, the media. On balance, perhaps the alarmist prognoses of what Trump may bring to the Davos table were just that: alarmist. As to what he actually said, it remains to be seen whether his reassuring words on trade convinced the audience. Perhaps it will take more than pretty words for Trump to overcome the grave suspicion and reservations with which his economic policies are viewed.

Copyright Business Recorder, 2018