Absent Donald Trump dominates Davos

This week, senior business executives and 350 government leaders including 60 heads of state will meet in Davos, Switzerland for the World Economic Forum’s annual meeting. They meet to promote more international collaboration by countries and between business and government.

The Davos organisers think collaboration has flatlined in recent years after good progress before the Covid-19 pandemic. They find the wars and breakdowns in geopolitics particularly worrying.

The Davos website sets out three main goals. It wishes to respond to geopolitical shocks, to stimulate economic growth – and to ensure a just and inclusive energy transition. It sees climate change and possible misuses of technology as two major risks. The forum proposes rebuilding trust, safeguarding the planet, investing in people, finding new sources of growth and using artificial intelligence (AI) in business.

Trump dominates despite absence

Hanging over the meeting is the big change in attitudes and policy underway in the US. President Trump wishes to sweep aside much of the international treaty-based thinking that is the Davos view.

He has withdrawn the US from the Paris Treaty framework to cut carbon dioxide emissions, undermining a central plank of Davos’ work on the green transition. He has pulled the US out from the World Health Organisation, removing its largest member contribution to its costs. He sees it as being under too much Chinese influence, with Beijing paying far less to keep it going. President Trump probably retains disagreements with what they did over Covid-19 lockdowns.

The returning occupant of the Oval Office sees international politics as a series of negotiations, alliances and deals between sovereign states – not as a series of binding legal commitments which national governments need to follow and obey. He will use tariffs as threats to get changes of policy. If a country persists with policies that he thinks represent unfair trade, measured by a large goods trade surplus with the US, he will take action.

Who is attending the WEF?

President Trump will talk to the forum via an online connection. The European Union (EU) is represented by the President of the Commission Ursula von der Leyen and the President of the European Parliament Roberta Metsola. China has sent Vice Premier Ding Xuexiang. Ukraine’s President Volodymyr Zelensky, South African President Cyril Ramaphosa, Malaysian Prime Minister Anwar bin Ibrahim and many others will attend. Chancellor Olaf Scholz of Germany is mentioned on the website though he, of course, faces a very difficult election in February which polls say he will lose.

There is an impressive line-up of the executive heads of global bodies, including the United Nations (UN), International Monetary Fund, World Trade Organisation (WHO), the North Atlantic Treaty Organisation (NATO), and the World Health Organisation. They will all be apprehensive about the changes to come from the new Trump administration in the US.

The US is a major funder of these bodies and is now going to be more of a critic of what they do and what they say. The WHO has already suffered a major blow for Mr Trump’s tariff threats. NATO knows it must get more military spending from their members to share the burden that the US currently carries. The World Trade Organisation is on notice to get better at standing up to unfair trade practices as the US seeks to run its own trade policing.

What is likely to happen?

The forum is likely to repeat its wishes for new green growth led by an accelerated programme to decarbonise and protect nature. They will note that the UN is likely to miss most of its sustainable development goals and needs to generate more actions around the world to pursue these aims. It will affirm its interest in helping promote peace in the Middle East but is unlikely to propose a way to peace in Europe. With President Zelensky in attendance, attendees are likely to be supportive of the Ukrainian position in the conflict.

There will be affirmations of the importance of digital technology and the opportunities generated by AI applications, balanced by enthusiasm for proper regulation of this fast-growing sector. There will be little discussion of why, as they note, electorates in the many elections of 2024 have largely abandoned incumbent governments, the very people in the room last year at Davos.

Its conclusion, written into the papers for the meeting, is “a sense of urgency” for more collaboration by leaders, though this will be “challenging”. The authors of the meeting narrative think this is “the end of an era”, though they do not elaborate much on why or what might replace it.

Elections a reflection on WEF goals?

Why have the policies of many governments – and by implication the WEF – been rejected in elections?

The defeats of the Democrats in the US and the Conservatives in the UK, the fall of the governments In France, Germany and other smaller EU countries stems from voter anger at the inflation that gripped their economies, unhappiness about the level of migration and frustration at hits to living standards.

Many electors say they are concerned about carbon dioxide but are unwilling to pay more or change their own lifestyles to help tackle the issue. They want government to do it – and to offer them cheaper energy at the same time. Inflation was blamed on Russian leader Vladimir Putin’s war in Europe hitting energy prices, but inflation had set in before the war. Electors have not been forgiving of governments and their central banks who allowed this to happen. High levels of migration prompts concern about access to housing and public services, as governments seek to find ways to meet the extra demands.

There will be battles ahead between the Davos view of the world and the US one. Over the central issue of energy and climate change, the world’s largest producer of carbon dioxide – China – will still back the idea of moving to net zero. It actions however, will be limited.

So far this decade, China has been increasing its own large output of the greenhouse gas, wanting the advanced countries to do all the work. Now, the world’s second largest emitter, the US, is opting out it becomes more likely the world will miss its targets and live with fossil fuels for longer.

The Trump administration will “go for growth” with tax cuts, a smaller government and deregulation, which will pose more of a competitive challenge to Europe. The current harmony between the new US Administration and the big technology companies reinforces US competitiveness worldwide.

The global bodies, which are strongly represented at Davos, need to build bridges with President Trump if they are to keep their US payments and engage the US fully in their aims. It is difficult for any of them to be effective if they are in disagreement with Washington and are short of money.