President Donald Trump urged global business leaders on Thursday to manufacture in the United States if they want to avoid facing tariffs, in his first major speech to international leaders since his return to the White House this week.
Since his inauguration on Monday, Trump has said that Washington could impose steep tariffs on major trading partners Canada, Mexico and China as soon as Feb. 1.
He has also signed a flurry of executive orders, pulling the United States out of the Paris Climate Accords and the World Health Organization (WHO).
"My message to every business in the world is very simple, come make your product in America and we will give you among the lowest taxes of any nation on Earth," Trump said on Thursday, speaking remotely to the World Economic Forum in Davos, Switzerland.
"But if you don't make your product in America, which is your prerogative, then very simply, you will have to pay a tariff," Trump said.
"Differing amounts, but a tariff which will direct hundreds of billions of dollars and even trillions of dollars into our Treasury to strengthen our economy and pay down debt."
Trump began his presidency on Monday without immediately imposing the tariffs he had promised voters, including a 10% duty on global and 60% on Chinese goods. But he said that Canada and Mexico faced a 25% duty on Feb. 1 on goods they ship to the U.S. because of illegal immigration and illicit drug shipments across U.S. borders.
Trump on Tuesday extended the Feb. 1 deadline to China, threatening a 10% duty, and said the European Union would also face tariffs.
"We're going to be demanding respect from other nations."
In his speech, Trump said he would demand Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to bring down the cost of oil, which he says would help end the war in Ukraine instantly.
"If the price came down, the Russia-Ukraine war would end immediately. Right now, the price is high enough that that war will continue – you got to bring down the oil price," he said.
He also called on the Gulf nation to cut oil prices.
"They should have done it long ago. They're very responsible, actually, to a certain extent, for what's taking place," Trump added.
He said he wanted to meet Russian President Vladimir Putin soon to secure an end to the war with Ukraine and expressed a desire to work towards cutting nuclear arms.
In the run-up to his Nov. 5 election victory, Trump declared many times that he would have a deal in place between Ukraine and Russia on his first day in office, if not before. His advisers now concede the war will take months to resolve.
"I really would like to be able to meet with President Putin soon to get that war ended," he said on Thursday.
"And that's not from the standpoint of economy or anything else. It's from the standpoint of millions of lives are being wasted ... It's a carnage. And we really have to stop that war."
Trump also said U.S. efforts to secure a peace settlement were now hopefully under way, but gave no details. Russia invaded Ukraine in February 2022.
Trump also said he will ask Riyadh to increase a planned U.S. investment package to $1 trillion from an initial reported $600 billion.
A day earlier, Trump and Saudi Arabian Crown Prince Mohammed bin Salman discussed what the White House called the kingdom's "international economic ambitions" as well as trade issues.
Earlier on Thursday, the Saudi State news agency said the kingdom wants to put $600 billion into expanded investment and trade with the U.S. over the next four years.
"But I'll be asking the Crown Prince, who's a fantastic guy, to round it out to around $1 trillion," Trump said. "I think they'll do that because we've been very good to them."
Trump said he expected to have a "a very good relationship" with China, but stressed that "all we want is fairness."
During his first administration, Trump engaged in an escalating tariffs war with Beijing, and he has threatened higher duties on the campaign trail as well.
Since taking office, he has vowed an immediate overhaul of the U.S. trade system, promising to tariff and tax foreign countries to the benefit of US citizens.
He has signed an order directing agencies to study trade issues ranging from deficits to unfair practices – paving the way toward further tariffs in the future.
In wide-ranging remarks, Trump also said he would demand that interest rates drop immediately and that other countries should follow suit – marking his first broadside at Federal Reserve (Fed) monetary policymaking since taking office.
"I'll demand that interest rates drop immediately," he said. "Likewise, they should be dropping all over the world. Interest rates should follow us all over."
Trump's remarks come five days before the Fed's first policy meeting to be held during his administration – on Jan. 28 and 29 –with very broad expectations officials will leave rates unchanged.
The Fed last cut its overnight interest rate target by a quarter percentage point at its December policy meeting to between 4.25% and 4.5%.
For all of 2024, the Fed lowered rates by a full percentage point amid easing inflation pressures and a sense among Fed officials that they wanted monetary policy to exert less restraint on the economy's momentum. The December meeting also saw officials trim estimates of cuts in 2025 amid expectations of higher levels of inflation and slightly better growth.
A number of Fed officials, including Chair Jerome Powell, have already expressed a need for caution about lowering rates further from here because of sticky inflation. Several policymakers had made an effort to take potential Trump policies into account in new forecasts issued at the December policy meeting.
Trump's pursuit of large-scale tariffs on America's trading partners, which are de facto taxes on imports, together with his plan to deport large numbers of undocumented immigrants, run a real risk of reigniting inflation pressures, in the view of many economists and investors.
Trump was broadly critical of the Fed for raising rates during the first two years of his first term in office and lambasted Powell, whom Trump had elevated to lead the U.S. central bank, for leading that effort.
Powell's term as Fed chairman ends in 2026 and before taking office, Trump said he was not inclined to remove Powell early, amid legal questions as to whether such an action would even be possible.