Folks at Davos saw pragmatism in Trump
DAVOS, Switzerland — No one was declaring President Donald Trump a changed man. Privately, executives and global leaders who had gathered in Davos continued to worry that the U.S. president could yet indulge his worst instincts — and his penchant for shock on Twitter — to deliver a geopolitical crisis, open up a new front in trade hostilities or offend a vast group of people.
But a rough consensus emerged over Trump’s two-day visit that his administration had shown itself to be more pragmatic than advertised. Many were inclined to view the president’s most extreme positions as just aggressive bargaining postures.
“There’s a very constructive mindset in the Trump administration to find the best path forward,” said Vas Narasimhan, global head of drug development for Novartis. “I’m optimistic that, with other world leaders, most of these issues can be tackled in a productive way for the global economy and for global businesses.”
During a dinner Thursday night, Trump made the rounds, stopping to ask executives how they plan to increase investment in the United States, according to attendees.
In his speech, Trump took credit for a booming U.S. stock market and strong economic growth, pointing to the regulations his administration has slashed, as well as the $1.5 trillion package of tax cuts he championed and navigated through Congress. He left the impression that he was above all eager to woo foreign investment, as if he were leading some amped-up U.S. Chamber of Commerce.
“Over the past year, we have made extraordinary strides in the United States,” Trump said. “After years of stagnation, the United States is once again experiencing strong economic growth.”
Economists note that the U.S. economy is into its ninth year of expansion, a trend that speaks to how the aftermath from the 2008 financial crisis has finally run its course. A surge of cash delivered by the Federal Reserve has stimulated commercial activity.
The International Monetary Fund this week lifted its forecasts for U.S. growth in large part because of Trump’s tax cuts. Economists note that the benefits fall overwhelmingly on corporations and wealthy U.S. households, exacerbating economic inequality.
But Trump framed the tax cuts as a broad source of what will be better days for all Americans. And he gained the unbridled endorsement from the man who heads the World Economic Forum, Klaus Schwab, whose eagerness to flatter his interlocutors is legendary.
“On behalf of the business leaders here in this room let me particularly congratulate you for the historic tax reform,” Schwab said, adding that the tax cuts were “fostering job creation while providing a tremendous boost to the world economy.”
Whatever the optics of the head of an institution dedicated to reducing economic inequality offering his unqualified support for Trump’s tax cuts, Schwab was indeed speaking for business.
Jeffrey Rosen, deputy chairman of the financial advisory firm Lazard, said: “U.S. tax reform makes it more economic to do business in the United States. Deregulation makes it easier. These messages appear to be resonating with CEOs of businesses outside the U.S.”