Media reports claim that at the World Economic Forum, which is taking place this week in Davos, Switzerland, European business leaders made statements to some extent downplaying concerns about the likely impact and consequences of a potential transatlantic trade war.
It is worth noting that the mentioned threat is a realistic prospect. Brussels and Washington may find themselves on opposite sides of the trade tension process if the repeatedly stated intentions of the President of the United States, Donald Trump, to tighten tariff policy are implemented. The materialization of this plan as a whole will contribute to the escalation of the negative dynamic of geopolitical relationships that is already being observed. Trade is one of the most important dimensions in the system of cooperation between world capitals, therefore, any tension in the relevant space of the implementation of economic processes will have unambiguously negative consequences for what can be called global interaction.
Perhaps the European business leaders’ optimistic vision of the prospects for the future actions of the Donald Trump administration is something like complacency or a kind of faith in the best despite the darker circumstances and conditions of reality. At the same time, it is possible that the relevant point of view is based on a more constructive and comprehensive understanding of Washington’s moves logic at the forecasting level.
The President of the United States has repeatedly pledged to impose tariffs on goods imported from the European Union. Against the background of the relevant prospects, Brussels has already signaled its readiness for additional duties against US products as part of its response to the mentioned possible actions by Washington.
It is worth mentioning that this week, during a speech to reporters, Donald Trump said that the European Union treats the United States very badly. In this context, he noted that Brussels would face tariffs, calling the appropriate measures the only way to achieve fairness. The mentioned rhetoric has an unambiguous semantic vector aimed at formulating the reasons for Washington’s tightening trade policy.
The Donald Trump administration is also currently considering imposing additional 10% tariffs on goods imported from China. According to media reports, the relevant measures may come into force as early as next month. Additional tariffs will be a painful blow for Beijing. Currently, exports are actually the main driving force behind China’s economic growth.
Global business leaders who took part in the World Economic Forum generally showed mixed reactions to Donald Trump’s tariff threat. At the same time, the vast majority of analysts are pessimistic about the mentioned plan. According to them, the implementation of the relevant intentions may provoke an acceleration of inflation in the United States. It is possible that the materialization of Donald Trump’s tariff threat will form a situation where all economies will face losses, but the largest systems will be in a better position. From this point of view, the United States has generally positive prospects, but nevertheless in the face of a general downturn.
JPMorgan Chase chief executive officer Jamie Dimon said that the duties that Donald Trump intends to slap on Washington’s trading partners may be viewed as a favorable scenario. He also noted that people should get over it.
UBS chief executive officer Sergio Ermotti warned at the same time that interest rates are likely not to fall so quickly if US tariffs trigger higher inflation.
Siemens chief executive officer Roland Busch said that this German industrial giant is tariff-proof. The specified sentiment is unequivocally optimistic amid fears of a materialization of a trade war scenario between the United States and the European Union.
When asked about the likely impact of Washington’s tightening trade policy on Siemens’ business, Roland Busch said that the company he heads is global and already has a relatively large presence in the US. It was also noted that the firm is very much serving local to local, and the same applies to other regions, China, and the European Union.
Moreover, Roland Busch mentioned the acquisition of the US company Altair, specializing in the development of engineering software, by Siemens. The value of the relevant deal was roughly $10 billion. Roland Busch also stated that the company he heads has recently been expanding its footprint in the United States.
During a conversation with media representatives, Siemens’s chief executive officer stated that normally tariffs, by definition, increase inflation, so it does not really help. In his opinion, the idea would be what can be done, and what kind of deals to make to really reduce the trade tariffs to the minimum level. He stated that free trade and low tariffs are driving growth.
Vestas chief executive officer Henrik Andersen noted that the idea that tariffs will bring the world to a better place is at least a new theory to many. The mentioned Danish company specializes in the production of wind turbines. Henrik Andersen also stated that additional duties on imported goods are likely to generate inflationary risk. Responding to a question about the prospects for trade tariffs in Europe and the souring regulatory environment for green energy in the United States, Henrik Andersen stated, let sense prevail.
SAP chief executive officer Christian Klein said that the mentioned measures from the United States would not be helpful. Also in this context, he noted the importance for technology companies of concluding deals with global trading partners. In his opinion, tariffs do not help world trade. He does not believe that this is a good thing, observing the dependence between Europe and the United States or the US and China.
SAP is a German software company. Christian Klein stated that in Davos he talked with several executives about how his firm could support them with its supply chain and finance software.
The SAP chief executive officer noted that everyone does business in China. According to him, the Asian country also wants to continue doing business in the United States. He stated that it is important for technology to build bridges and form resilient supply chains.
