At the World Economic Forum (WEF) Annual Meeting 2025 in Davos, US President Donald Trump unveiled his ambitious tariff strategy aimed at reshaping global trade dynamics. Trump announced his expectation of generating up to trillions of dollars in tariff revenue from companies manufacturing their products outside the US. This move is part of his broader plan to bolster domestic manufacturing, offering a reduced corporate tax rate of 15 percent for US-based companies compared to the current 21 percent.
Addressing the forum virtually, President Trump didn't hold back on his criticism of the European Union. He argued that the EU's high tariffs and stringent regulations are significant barriers preventing US products from entering the European market, stifling American businesses on a global scale.
The announcement has ignited discussions among global leaders and industry experts about the potential implications for the world economy. Ngozi Okonjo-Iweala, Director-General at the World Trade Organization (WTO), cautioned against the dangers of a tariff war. She highlighted that retaliatory measures, whether a 25 percent or 60 percent tariff, could plunge the global GDP into double-digit losses reminiscent of the 1930s, leading to catastrophic economic consequences.
European Commissioner for Economy and Productivity, Valdis Dombrovskis, echoed similar concerns. He emphasized that raising tariffs is not an effective solution for addressing economic or national security issues and urged President Trump to focus instead on tackling economic inequality within the US.
Adding to the discourse, European Central Bank (ECB) President Christine Lagarde informed CNBC that Europe must brace itself for the potential trade tariffs introduced by the newly inaugurated US President Trump, signaling a need for strategic economic preparedness.
The global community now closely watches how Trump's tariff policies will unfold and their broader impact on international trade relations and economic stability.
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Leaders grapple with their own message as Trump 2.0 debuts at Davos
cgtn.com
