US President Trump threatens tariffs at 2025 Davos World Economic Forum

United States President Donald Trump has delivered the first international speech of his second term, appearing via livestream before the World Economic Forum in Davos, Switzerland.

Thursday’s remarks, however, took a combative approach to international diplomacy, as he once again threatened tariffs against foreign competitors — and even allies like the European Union (EU) and Canada.

“My message to  every business in the world is very simple. Come make your product in America, and we will give you among the lowest taxes of any nation on earth,” Trump said.

“But if you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff. Differing amounts, but a tariff.”

Trump, a real estate magnate and former reality TV star, faced a largely friendly audience at the Davos forum, known for bringing together some of the biggest business leaders in the world.

Many of those who raised questions after his speech were introduced as people Trump knew well — or even self-identified as his friend.

The Republican’s speech came a mere three days after he was inaugurated in Washington, DC, and his remarks echoed many of the points he raised in his inaugural address, once again promising to bring a “golden age” to the US.

He also repeated his usual list of grievances, including against his predecessor, former President Joe Biden, and members of his administration.

“They’ve allowed other nations to take advantage of the US. We can’t allow that to happen anymore,” Trump said.

Here are five key takeaways from Trump’s speech.

Donald Trump revisited familiar themes in his speech to the Davos conference in Switzerland [Yves Herman/Reuters]

Trump uses carrot-and-stick approach

The Republican leader led his speech with a broad appeal to business leaders across the world, calling on them to move their industries to the US.

He touted plans to slash corporate taxes and lower interest rates to create a climate favourable to business growth.

“My administration has also begun the largest deregulation campaign in history, far exceeding even the record-setting efforts of my last term,” Trump said.

He offered a trickle-down vision of US prosperity as benefitting the whole world.

“They say that there’s light shining all over the world since the election. And even countries that we aren’t particularly friendly with are happy because they understand there is a future, how great the future will be,” he said.

“Under our leadership, America is back and open for business.”

But, he warned, there would be tariffs imposed on business that refused to invest in this vision of American success.

Already, in recent months, Trump has threatened to impose tariffs of up to 60 percent on Chinese goods and 25-percent tariffs on items from Mexico and Canada.

Trump criticises European Union

The Republican leader, however, reserved special ire for the European Union, which he accused of imposing cumbersome regulations and attacking US businesses.

He cited recent antitrust cases against US-based tech titans as examples.

“ They took court cases with Apple, and they supposedly won a case that most people didn’t think was much of a case,” Trump said. “They won billions from Google. I think they’re after Facebook for billions and billions.”

He implied that the cases were motivated, in part, on the companies’ country of origin.

“These are American companies,” Trump said. “They shouldn’t be doing that. As far as I’m concerned, it’s a form of taxation.”

The US is the European Union’s top trading partner, and as of 2022, the US had a $131bn trade deficit with the group, composed of 27 member states. According to US government statistics, the US exported $592bn to the EU and imported $723bn.

Most economists believe deficits are not necessarily a sign of trouble: The imbalance in trade can be the result of numerous factors, including differences in currency value and consumer spending habits.

But Trump has zeroed in on trade deficits as a sign of economic weakness, and he has once again pledged to eliminate them, as he vowed in his first term, from 2017 to 2021.

He also compared Europe’s value-added taxes, or VAT taxes, of being a “non-economic or non-monetary tariff”.

“ From the standpoint of America, the EU treats us very, very unfairly. Very badly,” Trump said. “They essentially don’t take our farm products, and they don’t take our cars. Yet, they send cars to us by the millions. They put tariffs on things that we want to do.”

Canada: Become a state or face tariffs

In the weeks ahead of the Davos conference, Trump made clear he hopes to expand the US’s borders in the coming years, bringing the Panama Canal and Greenland under its control.

At a news conference earlier this month, Trump even refused to rule out “military or economic coercion” in his pursuit of those two territories.

But at Davos on Wednesday, Trump spoke briefly about another country he has in his crosshairs: Canada.

Trump has repeatedly said he would like to see Canada become the “51st state”, provoking anger from its northern neighbour.

“We’re going to be demanding respect from other nations,” Trump said at Davos, immediately pivoting to Canada. “We have a tremendous deficit with Canada. We’re not going to have that anymore. We can’t do it.”

According to the US government, Canada was the largest buyer of the country’s goods in 2022, accounting for $356.5bn in purchases. An estimated $2.7bn worth of goods and services crossed the US-Canada border each day in 2023.

But Trump has pledged to slap high tariffs on Canada, as a means of forcing the country to address drug-trafficking and irregular migration across the border.

At Davos, however, Trump teased another way to avoid the tariffs.

“As you probably know, I say: ‘You can always become a state. And then, if you are a state, we won’t have a deficit. We won’t have to tariff you,'” Trump said.

Economists, however, have warned tariffs can backfire, as other countries may respond to the US with tariffs of their own — the cost of which would likely be borne by consumers.

Trump decries Ukraine ‘killing fields’

Despite his aggressive posture towards tariffs and trade deficits, Trump once again touted his self-described role as a peacemaker, pointing to Russia’s full-scale invasion of Ukraine.

The war broke out in 2022, and at Davos, Trump once again took the opportunity to blame his predecessor, Biden, for allowing the invasion to unfold.

But he also pointed a finger at another target: oil prices.

“If the price came down, the Russia-Ukraine war would end immediately,” Trump said. “Right now, the price is high enough that that war will continue. You’ve got to bring down the oil price. You’re going to end that war.”

While the war has driven up energy prices, it is unclear how Trump envisioned the oil market ending the war in Ukraine. Sanctions due to the war have already placed significant strain on Russia’s economy.

Trump himself has threatened further sanctions and “high levels” of tariffs against Russia, if it does not end its war on Ukraine swiftly.

At Davos, he bemoaned the hundreds of thousands of lives lost on the battlefield there.

“That is an absolute killing field. Millions of soldiers are being killed,” Trump said. “Nobody’s seen anything like it since World War II. They’re laying dead all over the flat fields.”

But, he added,  efforts to secure a peace settlement “are now hopefully underway”. He also teased a possible deal with Russia to dismantle all or part of its nuclear arsenal.

“We’d like to see denuclearisation,” Trump said, citing conversations with Russian President Vladimir Putin during his first term.

“I will tell you that President Putin really liked the idea of cutting way back on nuclear. And I think the rest of the world, we would have gotten them to follow. And China would’ve come along.”

Trump mocks climate-change policies

As part of his push for deregulation, Trump  once again lashed out against environmental policies designed to reduce carbon emissions and mitigate the climate crisis.

The US is estimated to be the world’s second largest source of carbon emissions, behind China. Those emissions, largely from fossil fuels, enter the atmosphere as greenhouse gases that capture heat and cause temperatures to rise.

Still, on Monday, Trump once again withdrew from the Paris Agreement, an international climate-change accord designed to reduce emissions. He had previously pulled the US out of the deal in 2019, during his first term.

At Davos, he once again described the Paris climate accord as “one-sided”. And he repeated his pledge to “unlock” the US’s fossil fuel reservoirs.

“The United States has the largest amount of oil and gas of any country on earth. And we’re going to use it,” Trump said, promising “rapid approvals” for energy ventures.

Trump also mocked his political adversaries for advancing a “Green New Deal”, a slate of policy proposals in the US designed to bring down carbon emissions.

“It was conceived of by people that were average students, less-than-average students,” Trump said.

He accused the architects of carbon-cutting policies of peddling sensationalism.

“Remember the world was going to end in 12 years? Remember that? Well, the 12 years has come and gone. It was going to end. It was going to all foam into earth.”

Still, climate-change experts have noted that 2024 was the hottest year on record — and if current trends continue, weather events could intensify, leading to deadlier natural disasters.

Already, the US is grappling with devastating wildfires in southern California that have killed 27 people, likely heightened by unseasonably dry weather.