President Donald Trump’s top economic advisers set the stage for the rollout of his “America First” manifesto on the world stage.
A day before Trump’s scheduled arrival in the Swiss ski resort of Davos for the World Economic Forum’s annual meeting, Treasury Secretary Steven Mnuchin endorsed the dollar’s decline as a benefit to the American economy and Commerce Secretary Wilbur Ross said the U.S. would fight harder to protect its exporters.
“Longer term, the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency,” he said.
The greenback, extending its 2018 slide after Mnuchin spoke, is now at its lowest in three years as measured by the Bloomberg Dollar Index. Investors have sold the currency in part because of concern over Trump’s protectionist push highlighted by this week’s slapping of tariffs on solar panels and washing machines.
While Mnuchin’s blast echoed Trump administration doubts over a strong currency, it marked a confrontation with the global elite in Davos over their “America First” agenda. Ross, speaking alongside Mnuchin, says more measures at defending U.S. commerce are in the offing.
“Trade wars are fought every single day,” he said. “So a trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart.”
It’s a message Trump is likely to send in person on Friday when he becomes the first American president in 18 years to address the Davos gathering of corporate executives and investors who tend to favor free trade.
Trump’s stance has already been challenged by Davos delegates with fellow leaders using the forum to talk up globalization as an economic force for good.
Deal Excludes U.S.
Canadian Prime Minister Justin Trudeau announced on Tuesday that a group of 11 Pacific rim countries agreed to move forward on an Asia-Pacific trade pact that Trump withdrew from in 2017. Liu He, a top economic adviser to China’s President Xi Jinping used a Davos speech to promise China will continue to open up its economy and embrace foreign investment.
The U.S.’s latest move on tariffs raises the stakes for the world economy that’s enjoying its best performance since the financial crisis. Heightened trade tensions between America and China, the world’s two biggest economies, has been routinely listed in Davos as one of the biggest threats facing global growth.
“The U.S. at this point is in a relatively combative mode on trade arrangements,” UBS Group AG Chairman Axel Weber told Bloomberg Television in Davos on Wednesday. “Most of the companies here have thrived from globalization and being able to offer services globally. Is there going to be a setback?”
Still, DowDuPont Co. Chairman Andrew Liveris said in Davos that Trump’s trade policies are helping U.S. companies when they negotiate overseas deals. That’s because nations now are concerned that if they don’t give an American corporate “a shot,” their own companies could be denied opportunities in the U.S., he said.
“It’s had an unintended consequence, which is actually amazing,” Liveris said. “And maybe that, at the end of the day, is President Trump’s strategy.”