At Davos, delegates talk down Trump but bet big on
America
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[January 25, 2018]
By Alessandra Galloni
DAVOS, Switzerland (Reuters) - Since Donald
Trump won the U.S. presidency, business has been booming for
Monaco-based businessman Manfredi Lefebvre d'Ovidio.
His privately owned luxury cruise operator, Silversea Cruises,
registered an immediate pick-up in bookings from its main U.S. market
and demand has continued to grow.
"Let's face it, we should be grateful to Trump," said Lefebvre d’Ovidio,
a delegate to the World Economic Forum at the Swiss ski resort of Davos
where Trump will speak on Friday.
"The economy is strong, and the American consumer is spending."
As the world's top policymakers and executives await Trump to address
the Davos summit, they are privately voicing disbelief and
disgruntlement at his foreign affairs, retreat on environmental issues
and colorful tweeting.
African leaders feel insulted after Trump is said to have classified
their countries as shitholes, a comment he denies making. Latin American
leaders are criticizing his retreat from a Pacific-wide trade pact. And
some top executives say they have declined invitations to meet with him
during the summit.
But with the U.S. stock market soaring, Trump's corporate tax cuts
padding companies' pockets and U.S. consumers spending again, companies
here are quietly applauding the U.S. president even as many Davos
delegates see him as an unwelcome outsider.

"On the values front, it's hard to see the international elite here in
Davos applauding Trump, but on the wallet side of things, it may be
different. That is the fundamental tension," said Helene Rey, economics
professor at London Business School.
Some government leaders, economists and bankers are warning against an
overheating of the U.S. economy, an increase to the $20 trillion
national debt and a "race to the bottom" on tax cuts. All the same,
firms have high hopes for the U.S. market.
Kim Fausing, chief executive of Danish group Danfoss, which makes air
conditioning and heating systems, said the company was committed to the
U.S. market, where it has a dozen factories.
"This is a market that rules itself without too much intervention from
the state, so it's a very attractive market for any company," Fausing
said.
Hussain Sajwani, chairman and founder of UAE property firm Damac, is a
friend of Trump and his main business partner in the Gulf region. He is
looking more favorably at the United States after Congress passed
Trump's corporate and personal tax cuts.
"We were looking at property development in the States and the previous
tax brackets were not very attractive and now they're more attractive,"
said Sajwani, who owns Damac Hills, a major development that includes
the Trump International Golf Club in Dubai.
Bob Dudley, chief executive of oil major BP <BP.L>, said he believed the
United States was not the only good destination for oil companies. But
he added that the tax cut "certainly makes the United States more
competitive".

Trump's $1.5 trillion tax plan unveiled in December slashed the
corporate rate from 35 percent to 21 percent and temporarily reduced the
tax burden for most individuals as well.
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Helicopters approach to land before the arrival of U.S. President
Donald Trump at Zurich airport, Switzerland January 25, 2018.
REUTERS/Arnd Wiegmann

In its wake, several U.S. companies have announced plans to increase
investments, wages and bonuses. This week, JP Morgan Chase unveiled a $20
billion plan to hike wages, hire more people, open branches and expand its
business -- the most explicit response to the tax cuts of any major bank so far.
Two weeks ago, when Trump said he would attend the Davos summit, the assumption
was that he would be entering a lion's den of hostile global elites. And in the
opening days, speakers criticized his administration for protectionist measures
such as recent import tariffs on washing machines and solar panels -- moves that
Washington said would protect American jobs.
The "shithole" controversy helped sour the mood.
"I'm from Africa, so the sentiment toward the U.S. president is not too positive
right now," said Jabu Moleketi, chairman of the Development Bank of Southern
Africa.
French President Emmanuel Macron, in his keynote address, decried a "race to the
bottom" that could emerge from countries lowering tax rates and trade wars,
though he too plans to cut corporate tax rates over the next five years.
Beneath the criticism, though, a faint chorus of appreciation for some of
Trump's policies can be heard.
"I think he's going to address this group and say well I understand a lot of you
may not like me but if you look at your wallets you should love me," said
Harvard University economics professor Kenneth Rogoff.

At an early news conference on Monday, the International Monetary Fund cited
U.S. tax cuts as one of the reasons for its upgraded forecasts for global
economic growth.
John Tuttle, head of global listings at the New York stock exchange, said
interest from foreign issuers was rising.
"It's been a very good year for non-U.S. listings. In fact I would say a
significant percentage, north of 35 percent of the proceeds raised last year by
companies on the New York stock exchange were from outside the United States,"
Tuttle said.
Lefebvre d’Ovidio is extra-grateful to the U.S. administration, after the recent
tax cut.
The original tax proposal included a cruise-ship tax provision, but Alaska's
U.S. senators helped strike that out on the basis it would have hurt Alaska's
vital tourism revenues.
"We didn’t even get taxed," he said. "It was an extra."
(Additional reporting by Noah Barkin, Yara Bayoumy and Simon Robinson; Editing
by Mark Bendeich)
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