LDN - Business

Trump confronts Davos on trade abuses, talks up dollar

[January 26, 2018] By Steve Holland

DAVOS (Reuters) - U.S. President Donald Trump will tell a top-level gathering of political leaders and chief executives on Friday that his administration will not tolerate intellectual property theft and trade abuses, senior U.S. administration officials said.

An official, briefing journalists at the World Economic Forum in Davos, also sought to dispel any impression of disarray over the value of the dollar, saying there was no "daylight" between Trump and Treasury Secretary Steven Mnuchin over the strength of the currency.

Trump said on Thursday he ultimately wants the dollar to be strong, lifting the greenback briefly and contradicting Mnuchin who depressed the dollar earlier when he said he was happy with its current level.

Mnuchin's comments supportive of a weaker dollar were seen by the markets as indicating a shift in U.S. policy and sent the greenback sharply lower, sparking concerns from European allies about a trade war.

"I don't think there's any daylight between the President and Secretary Mnuchin," one of the administration officials told reporters in Davos.

"I think that there were some people who took some comments that the Secretary made where he was essentially reciting and explaining in descriptive manner a basic economic principle and took it to represent ... some sort of policy announcement or shift."

"When you go back and look at the transcript of what he said, it was quite clear that that was not the case."

Trump is due to give the main closing address at the forum in Davos, where outright and veiled criticism of his America First agenda captured headlines ahead of the president's arrival on Thursday.

That agenda has included unilateral trade sanctions and threats of more action, particularly against China.

"The United States will no longer tolerate things like the theft of intellectual property or forced technology transfers or industrial subsidies ... and dumping, trade abuses," the U.S. official told reporters in Davos.

Trump was due to give his speech at 1300 GMT.

RULES OF THE ROAD

The official said Trump's stance on trade should be viewed less as a warning than an explanation of his commitment to the international trading system and enforcing "rules of the road".

Trump is the first sitting U.S. president to visit the annual summit since Bill Clinton in 2000. He was greeted on arrival on Thursday by hundreds of curious delegates who snapped pictures as he entered the congress center.

He made an immediate impression: apart from talking up the dollar, he threatened to withhold aid to Palestinians unless they pursued peace with Israel.

But the thrust of his visit has been to convince business leaders to step up investment in the United States.

"A lot of people are coming back to the United States. We are seeing tremendous investment and today has been a very exciting day. Very great day and great for our country. Thank you very much," Trump told reporters in Davos on Thursday.

After meeting the prime ministers of Britain and Israel on Thursday, Trump hosted a dinner with leaders of some of the world's largest firms, including Nestle, SAP and Siemens, Deloitte and Bayer.

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U.S. President Donald Trump looks on as he meets President Alain Berset of Switzerland (unseen) during the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 26, 2018. REUTERS/Carlos Barria

Trump, a real estate mogul and former reality TV star, had never been invited to Davos before. He basked in the praise of several executives, who applauded his tax cuts.

Two European executives told Reuters they were staying away from the dinner because they did not want to shake Trump's hand. One of them consulted with his wife and children before deciding to dine elsewhere.

Those who showed up were treated to a meal of grilled beef tenderloin with green pea puree or fried Swiss pike perch with purple carrot puree.

Trump gave each corporate leader an opportunity to describe their businesses briefly. Many mentioned the corporate tax cuts that Trump pushed through the U.S. Congress late last year as a positive sign of growth and investment, according to a Reuters reporter who was present.

His speech on Friday will follow a week of warnings by European leaders on the dangers of nationalism, isolationism and protectionism.

Without naming Trump, German Chancellor Angela Merkel evoked the build-up to the two world wars and openly questioned whether leaders had learned the lessons from those 20th century conflicts.

Before his trip to Davos, Trump imposed 30 percent tariffs on imported solar panels, among the first unilateral trade restrictions made by the administration as part of a broader protectionist agenda. [nL2N1PI2EY]

AMERICA FIRST

Trump later told CNBC in an interview that he supported a strong dollar and expected the currency to rise.

"The dollar is going to get stronger and stronger and ultimately I want to see a strong dollar," he said, adding that Mnuchin's comments had been misinterpreted.

There is broad concern in European capitals that 2018 could be the year Trump's 'America First' bark on trade turns into bite, as he considers punitive measures on steel and threatens to end the 90s-era North American Free Trade Agreement with Canada and Mexico.

Policymakers have been openly critical of his foreign policy but with the U.S. stock market soaring, corporate tax cuts padding companies' pockets and U.S. consumers spending again, some companies here are quietly applauding the U.S. president.

Trump used a TV appearance from Davos to laud America's relationship with Britain and sought to smooth over a recent bilateral spat caused by his retweeting of anti-Muslim videos originally posted by a leader of a far-right group.

(Additional reporting by Yara Bayoumy, Simon Robinson, Editing by William Maclean and Richard Balmforth)

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