At the World Economic Forum (WEF) Annual Meeting 2025 in Davos, US President Donald Trump unveiled a sweeping tariff plan, projecting up to trillions of dollars in revenue from companies manufacturing outside the United States. In his virtual address, Trump announced that companies producing abroad will face substantial tariffs, while those manufacturing within the US will benefit from a reduced corporate tax rate of 15 percent, down from the prevailing 21 percent.
Trump criticized the European Union, stating that it makes it difficult for US products to enter the European market due to high tariffs and restrictive regulations. \"The EU imposes high tariffs along with time-consuming regulations,\" he said, emphasizing the need for fair trade practices.
The announcement sparked vigorous discussions among global leaders and industry giants at Davos. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), warned that a tariff war benefits no one. \"If the world resorts to tit-for-tat retaliation, whether it's a 25 percent tariff or 60 percent, we risk returning to the economic turmoil of the 1930s and facing catastrophic double-digit global GDP losses,\" she cautioned.
European Commissioner for Economy and Productivity Valdis Dombrovskis echoed these concerns, stating that raising tariffs is not the appropriate tool to address economic or national security issues. He advised President Trump to focus instead on tackling economic inequality. \"Tariffs can escalate tensions and disrupt global supply chains,\" Dombrovskis noted. \"Addressing inequality should be a priority.\"
European Central Bank (ECB) President Christine Lagarde told CNBC that Europe must \"be prepared\" and anticipate potential trade tariffs from the newly inaugurated US President. \"We need to anticipate and be ready for possible challenges,\" Lagarde emphasized.
Across sessions, leaders deliberated on how Trump's tariff plans and policies might impact the global economy. The proposed changes have far-reaching implications, potentially affecting international trade dynamics and economic stability worldwide.
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Leaders grapple with their own message as Trump 2.0 debuts at Davos
cgtn.com
