And for good reason. THE Davos menat least those with American passports, have converted at accelerated speed to his agenda. Why go to Davos when everyone comes to court you at Mar-a-Lago, the headquarters of the Trump clan in Florida, or in Washington, where the 47th president of the United States will be enthroned on Monday?
The Mar-a-Lago conversion
Endowed with more than ever (170 million) dollars, Trump’s inauguration ceremony will be the culmination of a sequence which saw all the American bosses parade in his Florida residence to lay their loyalty and their donations at his feet. Their names are Jeff Bezos (Amazon), Mark Zuckerberg (Meta), Tim Cook (Apple), Sundar Pichai (Google), Sam Altman (OpenAI), Jensen Huang (Nvidia)… To please him, this emerging oligarchy, in the words of Joe Biden, hastily dismantled its programs of fact checkingdiversity or those which would be favorable to the climate.
With so much power in his hands, it is not clear what Donald Trump would have to say to European bosses. Like their governments, they look like rabbits caught in car headlights. And they are undoubtedly wondering how to weigh up when, what yesterday would still have been considered a conflict of interest between American tech and political power, is now displayed like a badge of honor. The new “robber barons,” as Joe Bide called them, no longer even have the modesty to pretend.
Faced with this new reality, we were initially reassured on this side of the Atlantic by saying that Trump was going to attack China as a priority, making good on his threat to implement customs taxes of up to 60% on Chinese imports. It’s less and less safe.
Firstly because China was burned by the first Trump mandate, it does not intend to let this happen and it has the means for its policy. Already under pressure from the Biden administration, China is increasing preventive measures. Whether by launching an antitrust investigation into the leader in electronic chips Nvidia, by imposing strict controls on mineral exports or by imposing sanctions on American defense companies, Beijing has shown in recent weeks that it does not fear the balance of power.
And it works. This week, Trump did not say a word or tweet about China’s unprecedented trade surplus with the United States, of the order of 1,000 billion dollars. Regarding Taiwan, his last message is that the island should pay for its defense… Perhaps he is also not insensitive to the arguments of Elon Musk, half of whose Teslas are produced in China and who maintains the better relations with the current premier Li Qiang? In any case, he invited President Xi Jinping to his inauguration ceremony (who declined). This is not the case for Macron, Olaf Scholz or Ursula von der Leyen.
The European punching bag
For the moment, it is mainly on a weakened European economy that the Trump-Musk tandem is applying its blows. There was the various interferences in the British and German political life of the owner of the X network. There was especially this press conference on January 7, during which the future American president did not rule out taking Greenland, autonomous territory of Denmark, by force. He also protested: “With the European Union, we have a trade deficit of $350 billion. They don’t take our cars, they don’t take our agricultural products, they don’t take anything at all.”
Whether it is factually false is secondary. Certainly, the deficit exists. The European Union exported 504 billion euros worth of goods to the United States in 2023, and imported 347 billion euros worth of American goods in 2023. However, it reduces as soon as we add services (396 billion euros). euros of American services purchased by Europe in 2023 compared to 292 billion purchased by the United States from Europeans). The American trade balance with Europe is therefore positive, at 7 billion. What’s more, investments by European companies in the United States have increased considerably under Biden.
-In fact, it will be Europe that will have the most to lose from the introduction of customs duties of 10% to 20% on its exports to the United States, as promised by Trump. Firstly because they will primarily concern goods which pass through customs. Then because the Europeans will have the greatest difficulty in overcoming their divisions to tax American goods in turn.
To a large extent (a third), Europe buys strategic gas and oil from the United States, which replace the Russian source of supply. Then, in terms of both goods and services, the United States exports biotechnologies, digital and military technologies on which Europe has become completely dependent. Without even mentioning Washington’s geopolitical influence in Europe, embodied by NATO and its nuclear umbrella, which is enough to neutralize any desire for too firm a reaction towards the American ally.
The technology gap
Despite attempts to catch up in innovation in the 2000s and especially 2010, the European economy is lagging behind in all areas that matter, and will matter more and more in the years to come. There is no point in emphasizing the line concerning social networks, artificial intelligence or semiconductors, where the gap is abysmal. Europe is also losing ground in sectors that have made it strong, such as space and telecommunications and the automobile industry. This is also the case in pharmaceuticals, a sector which particularly concerns Switzerland, since it represents half of our exports to the United States.
What European alternative is there to Elon Musk’s Starlink satellite telecommunications service to offer internet to all? None, and the only competition that is emerging is also American, Amazon’s Kuiper project. In the automobile industry, the sea serpent of competition from Chinese cars is no longer a myth. Chinese electric SUVs no longer have anything to envy of high-end European vehicles. Who will resist the equivalent of a BMW for 15,000 francs?
Customs taxes will perhaps delay the deadline, but in Mumbai, Sao Paulo or Bangkok, the wave is already unstoppable. As a result, Volkswagen is closing factories in Germany while the country has been in recession for two years. In these circumstances, it is difficult to see Europe importing more American cars, as Trump wants.
The turkeys of the party
The pharmaceutical industry has an additional problem. Robert Kennedy Jr, the health minister retained by Trump (who has yet to be confirmed by the Senate) is an avowed enemy of Big Pharma. At the beginning of last December, however, he met the CEOs of Pfizer and Eli Lilly at Mar-a-Lago, who have since been full of praise for him. The bosses of Novartis, Roche, Novo Nordisk or AstraZeneca were not invited… In Davos, they will be able to share their concerns regarding an American market whose margins have historically made the fortune of the sector.
At the end of the day, what will Europe’s flagship be left with? Aeronautics? Certainly, Airbus was able to benefit from recent setbacks. Luxury? Indeed, but how long will this legacy last? For the rest, the Europeans who will meet on Monday in Davos are likely to realize that they are the turkeys of the party that the new oligarchs will hold the same day in Washington.
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