**Davos 2025: Donald Trump’s controversial return and its global economic implications**
On January 23, 2025, the global economy gathered once again in the posh resort of Davos for the World Economic Forum. This year, expectations were high, but the real eye-catcher was the videoconference appearance of Donald Trump, the recently inaugurated 47th President of the United States. While his predecessors had traditionally promoted collaboration and multilateralism, Trump made a resounding comeback with a clear message: “Come and manufacture in America or prepare to pay tariffs.”
### A new era of protectionism?
Trump’s direct call for global companies to repatriate their operations to his country marks a significant departure from the free-trade principles that have traditionally dominated discussions at Davos. This protectionist approach raises crucial questions about the future of international trade relations. As global markets continue to recover from the socioeconomic impacts of the COVID-19 pandemic, the push to reduce reliance on international supply chains could have unintended consequences.
Companies, from tech giants to multinational industrial corporations, now find themselves in a difficult position. Their location decisions are no longer driven solely by cost or efficiency considerations, but also by geopolitical factors. While Trump sees the repatriation of industries as a way to revitalize the American economy, it could also exacerbate trade tensions with other nations.
### Echoing nationalist rhetoric
Trump is not the only head of state taking a nationalist approach. Argentina’s President Javier Milei has also signaled that the world is moving toward an economic model based on individual freedom, praising leaders who share these values, from Italy to Hungary. This phenomenon raises the question of whether we are witnessing the emergence of a new international alliance, based not on democratic and multilateral principles, but on economic nationalism, that could well rewrite the rules of international trade.
### The implications for global markets
The implications of such a trend are vast. The additional tariffs announced by Trump could lead to price increases for American consumers, and in turn, question the consumer-based economic model that the United States has long represented. According to the World Trade Organization (WTO), a 25% increase in tariffs could cause global trade to contract by a similar proportion.
Moreover, this policy could also weaken the United States’ position on the world stage. Reducing commitment to free trade agreements makes it less responsive to global challenges, such as climate change. Between April and October 2023, international cooperation in areas such as clean energy has made considerable progress. An “America First” policy could thus harm the collective dynamic needed to address crises that transcend national borders.
### His economic strategies: promises versus realities
Trump has promised tax cuts and deregulation, measures that appeal to many entrepreneurs and investors. However, these promises also raise questions about the sustainability of this model. Job creation goals may clash with the reality of an already tight labor market, where labor shortages in certain sectors run counter to the vision of rapid growth. Moreover, the actual implementation of the tax and regulatory proposals remains to be seen. Previous administrations have often faced considerable political obstacles to implementing reforms of similar magnitude.
### A global response needed
World leaders in Davos, such as the IMF’s Kristalina Georgieva and the ECB’s Christine Lagarde, reacted cautiously to the impending tariff hikes. Lagarde’s call to “keep calm” highlights the need to maintain balance in the face of growing protectionism. International organizations will need to do more to promote dialogue and encourage nations to work together, as global economic connectivity is more than ever an asset in the quest for sustainable and inclusive development.
### Conclusion
Donald Trump’s speech in Davos highlighted a new dynamic in international affairs and challenged the traditional principles of free trade. If his strategy comes to fruition, it could redefine not only the American economy, but the global economic landscape. World leaders and businesses must now navigate an environment where economic nationalism appears to be the order of the day. The world stands at a crossroads where decisions made today will shape global economic development tomorrow.