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Trump in Davos, as Our Columnists See It

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“Trump wants globalization to be a competition. He’s sure the U. S. will win, and what’s good for the U. S., he says, is good for the world.”
Many world leaders took the stage at the World Economic Forum’s annual Davos gathering over the past week in an event that generated nearly a quarter of a million tweets. None attracted as much attention as U. S. President Donald Trump. As they waited for Trump to speak Friday morning, Bloomberg View columnists Leonid Bershidsky in Berlin and Ferdinando Giugliano in Davos and their editor in London, Therese Raphael, chatted electronically about how the global elite view Trump’s first year. Here’s a lightly edited transcript of their conversation.
Ferdinando Giugliano: One slight problem: My mobile only has 29 percent battery left.
Leonid Bershidsky: Hi, 29 percent should do it. That’s enough to win some elections.
Therese Raphael: So let me just throw this out: As Trump touched down in Davos, there were two strains of opinion. In one, he is a danger to the world, as Patrick Pouyanne, chief executive of French oil giant Total SA put it. In another view, he’s a leader the world’s corporate chiefs can do business with. Trump the deal-maker or Trump the trade-wrecker? If there’s no consensus, does the evidence at least point to one or the other?
FG: I would say he is more of the latter, at least when it comes to economics. Fortunately, he has not wrecked many things so far, but that does not mean he won’t in the future. The North American Free Trade Agreement, U. S.-China trade, perhaps even the World Trade Organization. There is no shortage of deals he could destroy. Of course his team claims he only wants “fairer” deals, but is the rest of the world so prepared to give in?
LB: There’s actually a third scenario, too: Trump the temporary nuisance. George Soros said in his speech that he expected Trump to cease being a factor, perhaps even earlier than 2020 if there’s a Democratic landslide in 2018. If one takes that position, Trump cannot wreck much and it’s not worth it making deals with him. The real elephant in the room is perhaps not Trump but the U. S. as a big unknown: Which way is it going to turn? Trump’s tax reform appears to be good for business, but will it stand? Is the U. S. really turning inward, is this an illusion or is this a temporary phenomenon?
FG: Of course there is another side of Trump, the one Leonid alluded to. The tax cuts are going down very well with business people. The official line you heard time and again here at Davos is that tax reform is good, as companies will invest more and increase wages. But will this be really the case? Chances are these things would happen anyway as the economy improves. Still, the tax cuts are presenting European countries with a dilemma: Do they follow the U. S. and cut their own corporate tax rates, risking a race to the bottom? Or do they stay put and risk losing some business to the U. S.?
LB: European leaders have made much at this Davos forum of “being back.” German Chancellor Angela Merkel talked about Europe taking some responsibility for its own future now that the U. S. is no longer too interested, and French President Emmanuel Macron has made a big pitch to investors on France’s behalf. But there doesn’t seem to be a clear European consensus on what to do going forward. Macron doesn’t appear interested in tax competition. He seems to be betting on creating a cool new image for France. Merkel is certainly not cutting taxes now that she has an expensive coalition with the Social Democrats on her hands. Theresa May, judging by her speech at Davos, is preoccupied with tech policy. There appears to be a strong backlash against big U. S. tech companies but no clear consensus on how to deal with all the complaints about it — those concerning taxes, privacy and influence over elections. In other words, Europe doesn’t seem to have any coherent answers now that the U. S. is more of an enigma.
[Trump is about to speak.]
FG: The room here has basically filled up. Many more will have to remain outside. A delegate behind me puts it nicely: “Everybody hates him, everybody is dying to see him.”
LB: Is it a bit like a zoo scene? Everybody’s waiting for the lion to feed?
FG: Yes, though from what I have heard yesterday and today he should not be too outrageous. A short speech, sticking to the script, delivering the message that the U. S. is open for business, in no small part thanks to his tax and regulatory reforms; that the economy is doing great; and that the U. S. wants to continue to engage in trade but ensure it is fair. If that’s the case it would be a huge contrast with Macron’s speech from a few days ago, which was broad and long (maybe too long).
LB: If that’s all he has to say, was it worth coming all the way to Switzerland? I think he needs a big alpenhorn to blow. Or maybe he’s just come to listen to the band. What are they playing, anyhow? Shazam doesn’t know it.
FG: Trump is being praised here for his tax cut. As I mentioned in my recent column, this is the bit of Trumponomics that Davos Man likes. Trump is taking credit for economic growth and the stock market. On the second, he has a point. On the first, he should thank his predecessor and also the outgoing Federal Reserve chair, Janet Yellen. (I suspect he won’t). “Now’s the perfect time to bring your jobs, your investment to the U. S.,” he tells the audience.
LB: Trump says Apple, the world’s largest company, “has announced plans to bring $245 billion in overseas profits back home” to the U. S. Not true. Apple hasn’t promised to repatriate the entire cash pile. Apple chief Tim Cook must be gaping at this.
FG: “America first does not mean America alone.” Interesting opening from Trump. He’s definitely trying to act as the deal-maker here. On growth he is right. But will his policies really lead to faster long-term growth? I fear this is the wrong moment to pass tax cuts. That was an interesting line about reopening talks with Trans-Pacific Partnership countries. Of course, his aides say this would be on different terms compared to former President Barack Obama’s TPP. But maybe it’s a sign that he was burned by seeing other countries going ahead with a deal in Tokyo at the start of the week. He is so disciplined today, it’s almost boring.
LB: Disciplined, yes, but careless with facts as usual. It’s not true that the U. S. coalition has recovered “almost 100 percent of the territory one held by ISIS.”
FG: The most misleading statement is this idea that he is rebuilding America. That was Obama. He’s just building on his predecessor’s success.
[Speech ends.]
LB: That’s it? He could have done this via Skype, like exiled Catalan leader Carles Puigdemont.
FG: Trump was stroking this audience big-time. Xi Jinping’s speech last year trumps Trump’s though.
TR: Klaus Schwab, the major-domo of the Davos conference, is interviewing Trump now, asking what experience from the past has been most useful for his presidency. Trump predictably answers that he’s always been good at making money and at buying things that are failing and turning them around. We can refer readers to our Bloomberg colleague Tim O’Brien’s many columns debunking that narrative!
LB: His claims to have led a deregulation charge are untrue too. The actual performance is here. It says:
Speaking of Tim, there was a great quote in a recent column of his, where Trump, asked by a lawyer in a deposition how he saw the difference between exaggeration and lying, replies, “You want to put the best spin on a property,” and added, “no different than any other real estate developer, no different than any other businessman, no different than any politician.

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