President Donald Trump and his economic team arrived in Davos, Switzerland, yesterday morning with a familiar message for the global elites gathered at the World Economic Forum (WEF): You were wrong.

There, the president will rub shoulders with the globalists that his “America First” rhetoric has long since railed against.

Before leaving Washington, Trump tweeted to his 47 million followers that he was going to Davos “to tell the world how great America is and is doing”:

Trump’s forthcoming appearance at the World Economic Forum is much anticipated despite how at odds his protectionist “America First” rhetoric is with the globalist, pro-free trade vibes of the annual gathering of the world’s economic and political elite on the slopes of Davos.

The president has spoken out repeatedly about his eagerness to redraw the U.S.’ trading relationship with several countries — China particularly.

He’s already pulled the U.S. from the Trans-Pacific Partnership (TPP) trade agreement and has threatened to abandon the North American Free Trade Agreement (NAFTA) among the U.S., Canada, and Mexico.

But “America First” doesn’t mean it won’t be working with the rest of the world.

It just means that Trump is looking out for American workers and American interests, which is no different than what other leaders would do for their own countries…

Playing Europe’s Game

The continent’s heavy hitters, German Chancellor Angela Merkel and French President Emmanuel Macron, were the big tickets on Wednesday. And it’s safe to say they differ with their colleagues from across the pond.

Merkel warned against the “poison” of populism that leads nations to look inward, and she made the case for a common European approach to economic policy.

Macron, following her later in the day, urged global elites to do more to narrow the inequalities that have resulted from global capitalism’s excess.

Italy’s Prime Minister Paolo Gentiloni, however, was less circumspect.

He assailed Trump’s economic policy as a threat to global growth, urging Europe to “play its own game” and fill in gaps left by U.S. businesses.

Ahead of the visit, however, Gary Cohn, the White House senior economic advisor, said Trump would be holding onto to his “America First” principles while also making it clear that America was “open for business” with the rest of the world.

Cohn stated that the president will continue promoting fair economic competition and will make it clear that there can’t be free and open trade if countries aren’t held accountable to the rules.

Earlier in Davos, U.S. Treasury Secretary Steven Mnuchin prompted a fall in the value of the U.S. dollar by stressing the importance of a weaker dollar: “Obviously a weaker dollar is good for us, it’s good because it has to do with trade and opportunities.”

This suggests that the White House is eager for the value of the currency to fall in the hopes that it will boost U.S. exports.

Coming into Davos with such a confident economic stance, Trump and his team just might beat Europe at their own game…

Trump’s Davos Debut

Labeling Trump in Switzerland as a “man on a mission” is a bit of an understatement.

He’s committed to demonstrating his prowess on the world stage to a mountain town full of political and business leaders who were once skeptical of his administration.

Upon entering the forum’s hall, Trump declared that he’d arrived with a message of “peace and prosperity.”

He basked in warm praise from Israeli Prime Minister Benjamin Netanyahu and seemingly sought to smooth a reported rift in his relationship with his British counterpart Theresa May.

“I’ve never seen the holistic alliance between the United States, Israel, and your other allies in the region as strong, as unified as it is under your leadership,” Netanyahu said. “As you finish your first year in office, I want to say that I look forward to continuing our remarkable, tremendous friendship in the years ahead. And I want to express the appreciation of the people of Israel to you. Thank you, Mr. President.”

But while Trump’s particular style of politics continues rattling the international political and economic types who regularly flock to Davos, the first year of his presidency seems to have calmed most.

It turns out that all it took for Trump to finally win the affection of a hometown crowd was to cut taxes and regulations.

The U.S. economy has performed well through Trump’s first year in office and so have other prominent economies worldwide.

“I like a lot more stuff than I don’t like,” Goldman Sachs CEO Lloyd Blankfein said Wednesday. “I’ve really liked what he’s done for the economy, and I think he’s gone out of his way to be very, very supportive of the system… And I don’t want to be antagonistic to them. And frankly, I want to honor that.”

Trump is scheduled to address the World Economic Forum with a speech later this afternoon.

And just like Blackstone CEO Steve Schwarzman said, the world will find a big, positive surprise in Trump’s attendance in Davos.

There are leaders and companies all around the world who are looking at the U.S. now and saying, “This is the place to be in the developed world.”

The Bottom Line

Trump’s visit to the World Economic Forum in Switzerland is the first by a U.S. president since former President Bill Clinton in 2000.

A year ago, some Davos participants predicted that Trump’s protectionist rhetoric would lead to sluggish economic growth and lackluster stock market gains.

It didn’t.

And our president isn’t about to let that go unnoticed.

He and his administration are here to play the game and shake things up a good bit, too.

Until next time,

Jennifer Clark
Pro Trader Today