WTO chief: Stop hyperventilating about tariffs
Tariffs have been a hot topic in Davos too this week, but the world’s top trade official thinks we should “chill” about the subject.
Ngozi Okonjo-Iweala, director-general of the World Trade Organization (WTO), told a session at WEF that she senses “a lot of hyperventilation, and we need to take a deep breath.”
Okonjo-Iweala explains that tariffs are a “stroke of the pen” kind of policies.
They are very easy to use…so they are often used for solve problems that are not the fault of trade.
Trade is sometimes unfairly blamed for things that are not the fault of trade.
Trade deficits (something that irks ‘Tariff Man’ Donald Trump) are sometimes not due to trade issues at all, she argues, but , but due to macroeconomic unbalances.
For example, in one country there needs to be more consumption, or in another one there are no savings as everyone is spending all their money.
Okonjo-Iweala also points out that there is “resilience” in world trade, which currently totals $30.4tn, and 80% under WTO rules.
Milei defends Musk over hand salute
During his Davos speech, Milei also defended Elon Musk over his ‘hand salute’ which some have called an unambiguous Nazi salute.
Milei told the WEF that his “dear friend Musk” has been “unfairly vilified by wokeism in recent hours for an innocent gesture that only [showed] his gratitude to the people”.
As well as savaging feminism (see earlier post), Milei also attacked “sinister radical environmentalism”, claiming economic development is seen as little more than a crime against nature.
And he also attacks “the LGBT agenda”, for “attempting to impose the idea that women are men and men are women, simply based on self-perception”.
Updated
Ruth Porat, chief investment officer of Alphabet, has a more optimistic take on AI – she argues it can improve healthcare and reduce health inequality.
She explains to Davos that Google’s AlphaFold used AI to predict the structures of all 200m proteins on the planet, and then open sourced their work – a move that will accelerate drug discovery, as two and a half million scientists have now accessed the information.
Porat says this could improve the chances of early diagnosis of disease – a personal issue to her, as she has had cancer twice and was fortunate to be diagnosed early.
She explains:
40% of people in the United States will be diagnosed with cancer in their lifetime.
Globally, there are other diseases that are actually killing people before cancer does.
Early diagnosis is key.
Pope warns of dangers of AI
Pope Francis has warned Davos that artificial intelligence technologies can exacerbate a growing “crisis of truth”.
In a special message to the World Economic Forum, Francis urged political, economic and business leaders here to maintain a close oversight of the development of artificial intelligence,
It’s a timely warning, given the Davos promenade (outside the Congress centre) is packed with companies promoting their AI skills.
Francis does praise AI’s abilities, but warns that the tech also raises “critical concerns” about humanity’s future.
In a statement read by Cardinal Peter Turkson, a Vatican official, he says:
“The results that AI can produce are almost indistinguishable from those of human beings, raising questions about its effect on the growing crisis of truth in the public forum.
“To navigate the complexities of AI, governments and businesses must exercise due diligence and vigilance.”
Jonathan Reynolds reports positive talks in Davos; hails Trump optimism
Business and trade secretary Jonathan Reynolds has just been briefing journalists in Davos. He struck an upbeat tone, suggesting he has met several firms considering investment in the UK, while out here.
Reynolds said he does not expect the UK to be badly affected by any tariffs imposed by Trump, because we are not among the countries with which the US has a large trade deficit.
And while their politics are very different, he confessed to some admiration for Donald Trump’s determination to get things done - and his optimism.
“I listened to the inauguration speech. I think there is a test in most countries in the Western world, people asking, ‘can the government deliver for me?’ Can it address the issues?’
And I could see that was part of the picture that he was making. And I also detected a very optimistic message, in a sense. I mean, you start a speech with, ‘a new golden age has begun’. You could see how he was communicating that part of things.
So look, I think it would be, it would be wrong to say we should look at it and say we should be more like Trump. But we do have to show people that government can make a positive difference to their lives.”
Reynolds also appeared open to possible membership of the Pan-Euro Mediterranean Convention, which allows customs free trade across EU countries and a number of other markets - something commission vice chair Maros Sefcovic pointed to in an interview with the BBC.
Welcoming Sefcovic’s comments, Reynolds said, “it is obviously not a customs union,” - ie it would not cross Labour’s red line against joining such an arrangement.
“It’s not EU thing,” he continued.
“I mean Morocco or Algeria, Egypt, I think are all part of as well as Tunisia and Lichenstein, Switzerland. So it’s a wider, set of arrangements that do help in some sectors.”
He added that it would not solve the UK car sector’s challenges with the curent trade and cooperation agreement.
Reynolds says:
“We haven’t ever proposed ourselves that we joined...some sectors would benefit, some wouldn’t. But look, what I really welcome in that positive tone is a recognition that we should be ambitious”.
AI: Time for bed
Following Milei’s crumpet-dropper of a speech, we’ve returned to more traditional Davos fare with a panel discussion on technology in the future.
Marc Benioff, head of Salesforce, tells WEF’s boss class that they are the last generation of CEOs who will only be managing humans.
From this point forward… we will be managing not only human workers, but also digital workers. And that is just incredible.
Benioff explains that Salesforce powers WEF’s information management systems, and has added a AI-powered digital assistant within the WEF app that studies which sessions a user has attended and gives recommendations.
Nicholas Thompson, CEO of the Atlantic, reveals that this agent really works:
“I was out on the Promenade at 2am and I’d had seven drinks and the agent which had studied all my previous Davos visits said “Stop” and sent me to bed.
So thank you very much.”
[some of us were tucked up some time earlier, without the help of an AI agent, M’Lud.]
Updated
Milei: Long live freedom, dammit!
Javier Milei rounds off his speech to Davos by declaring that “a silent majority is gathering”, and that the world is facing a Copernican shift.
He tells the World Economic Forum that if organisations of its type want to turn over a new leaf, they must acknowledge their role in events of recent decades and make a mea culpa.
Reading what everyone else reads, or saying what everyone else says, is a mistake, he says, adding that the script of the last 40 years has run out:
I say to all global leaders, it is time to break free of the script.
Milei says he is proposing “we make the West great again”.
And then barks out:
“Long live freedom, dammit!”
which rather startled the lady next to me in the hall.
[Milei also ended last year’s speech with the same rallying cry].
Milei then cites Atlas Shrugged, the novel by Ayn Rand, saying that story ( that sometimes ranty ode to libertarianism – has now come true.
He’s arguing that the political class is today is both a referee and an interested party in the redistribution of wealth.
Updated
Javier Milei then takes a swing at feminism, telling delegates at Davos that it’s wrong to make femicide a seperate crime with tougher sentences than for murdering a man.
You are legally making a woman’s life worth more than a man, he argues.
Milei then claims that the gender pay disparity doesn’t really exist – the truth is that most men choose better paid work.
And in further unreconstructed remarks, he notes that women don’t complain that most prisoners, most plumbers, most victims of murder are men, as are most people who die in wars.
But if you say this, you’re told you’re a misogynist, he bemoans.
Updated
Javier Milei (formerly an economics professor) then expounds his theory that in recent decades, a political class has distorted liberalism, by bringing in socialism to redistribute the wealth created by capitalism.
He is also blowing his own trumpet about the economic changes in Argentina since he won power in 2023.
[that austerity programme, though, has led to the slashing of services and jobs, falling real wages, and violent protest last year]
Updated
Milei blasts 'sickly wokism'
Argentina’s president, Javier Milie, is launching an attack on “sickly wokism” at the World Economic Forum.
In his second visit to Davos, fresh from Donald Trump’s inauguration, Milei is giving a special address to delegates – in his unique style.
Milei claims that “woke ideology” is “the great epidemic of our times that must be cured”.
He claims it is a “cancer we must get rid of”, which has infected goverments of leading western nations, non-government organisations, universities and media outlets, and set the tone of the debate over the last decade.
Western civilisation cannot return to a path of progress, and usher in a new golden age, without tackling this woke menace, Milei tells WEF.
Channelling Harold Macmillan, Milei declares that “the winds of change are blowing”, insisting:
The truth is that there is something badly mistaken about the ideas that have been promoted through forums such as this one.
Milei throws a wide number of themes into this wokist box, including “radical feminism” and “gender ideology”.
Wokism, he claims, is a plot by the state to justify the redistribution of wealth.
Milei tells world leaders here in Davos that he feels less alone than a year ago, because an alliance is building – he cites Italian prime minister Giorgia Meloni, Israel’s Benjamin Netanyahu and the US president Donald Trump as leaders who embrace this “new way of telling people the truth”.
Slowly an alliance is building between countires which want to be free.
Hope has been rekindled, he adds.
Updated
The Ukraine breakfast also heard moving stories from soldiers involved in the war.
One described arriving, hungry, at a village after hours of fighting, and meeting a little boy wearing a Real Madrid shirt, who brought them bread, and then milk.
Then, five minutes after they left, Russian tanks turned up, the house was destroyed, “and I’m certain the boy died”.
He adds:
I thought to myself, do we do enough? Do we all do enough? Did we fail as his heroes?
Business David Rubenstein, tells attendees at today’s Ukraine breakfast that the conventional wisdom in Washington is that there will be some type of agreement or settlement truce this year.
Generally, when there is a conventional wisdom in Washington, it’s almost always wrong, Rubenstein warns.
He cites the example of world war 2, when the conventional wisdom in Washington after the D-Day invasion was that the Allies had won the war.
But then the Battle of the Bulge took place, with over 200,00 casualties, Rubenstein says.
He fears that if people “let their guard down” and believe a peace deal is close in the Russia-Ukraine war, Russia could put all its troops into one last effort, which could result in enormous amount of casualties.
Alexander Stubb, president of Finland, tells this morning’s Ukranian breakfast that Ukraine must start whatever peace negotiations begin from a position of strength.
“We need to keep on pushing the idea that there can be no negotiations without Ukraine",” he insists – a point he thinks Donald Trump, and general Kellogg the new US Ukraine and Russia envoy sees too.
Stubb says:
I think the early signs that we’re getting from the Trump administration are actually quite positive.
Stubb says Ukraine must retain its independence, its sovereignty (including the right to choose whether it wants to join the EU and or NATO), and its territorial integrity.
Stubb says we must not have a repeat of the Finland’s experience in the second world war, when it lost 10% of its territory, including the areas where his grandparents and his father were born.
Stubb adds that Ukraine needs to become a member of the European Union, and in the long run, Ukraine needs to become a member of NATO.
That is the only way in which Putin has lost this war, and lost this war big time
Stubb also reminds business leaders here in Davos of the opportunity to rebuild Ukraine.
Reconstruction is a low hanging fruit. It has to happen.
Mark Rutte acknowledges that Richard Grenell has a point!
The problem with funding is not the US, the problem is Europe, the NATO chief says:
“The problem, and president Trump has consistently made this point, is that in Europe, we are underspending in terms of defense.”
Not all members are meeting the target of spending 2% of GDP on defence, he points out, despite a recent pick-up in military spending.
The second problem is that 2% is “not nearly enough”
Rutte warns that NATO, collectively, will not able to defend itself in four or five years if we stick to the 2%.
Updated
US envoy Grenell: NATO members must pay their fair share
The new US presidential envoy for special missions has pushed back against Mark Rutte’s talk about Ukraine joining Nato, pointing out many members of the alliance aren’t paying their “fair share” already.
Richard Grenell, appointed by Donald Trump in December, says it is “pretty shocking” that so many foreign ministers in Europe, and so many American politicians, didn’t try to stop the Russia-Ukraine war, and criticises Joe Biden’s handling of the situation.
Grenell warns that “you’re going to run into a big buzz saw in America” if we have the NATO secretary general talking about adding Ukraine to NATO, when the American people are the ones that are paying for the defence.
Grenell declares:
You cannot ask the American people to expand the umbrella of NATO when the current members aren’t paying their fair share, and that includes the Dutch, who need to step up.
[that’s a pop at Rutte, the former prime minister of the Netherlands]
.@RichardGrenell, after Rutte talks about bringing Ukraine into NATO, says allies will run into a U.S. “buzz saw” if that’s a key goal of peace talks.
— Alex Ward (@alexbward) January 23, 2025
“You cannot ask the American people to expand the umbrella of NATO when the current members aren't paying their fair share.”
Moments earlier, Grenell, who is a key diplomat in the Trump admin, said “We find it pretty shocking that there are so many foreign ministers in Europe, so many American politicians at the time who just didn't try to stop the war.”
— Alex Ward (@alexbward) January 23, 2025
Argued for talks with Putin to end the war.
Updated
NATO chief Mark Rutte then warns that he sees too many politicians, both inside and outside Ukraine, discussing what peace talks would mean for the territory that Russia has captured, and for NATO membership for Ukraine.
The risk here is that we start to negotiate with Putin without the Russian president actually being at the table, Rutte says.
And the risk is that Putin sits in his reclining chair in Moscow, just ticking boxes…
Rutte reiterates that the focus must be to bring Ukraine to peace talks in the “best possible position”, so that peace is sustainable, and will never be challenged again.
Full NATO membership for Ukraine is then the easiest outcome, he argues.
And Rutte insists that Putin must not have a veto on who joins Nato – unless he wants to, of course, although that is not likely.
Introduction:
Good morning from Davos, where the third full day of the World Economic Forun is getting underway.
The head of NATO is calling on world leaders to “step up, not scale back” support for Ukraine, so that it can reach eventual peace talks with Russia in the best state possible.
Mark Rutte says it is important to “change the trajectory of the war”, warning that the front line is moving in the wrong direction.
Rutte says there are three important reasons to do this.
Firstly, for Ukraine itself. Rutte says we cannot allow one country invades another country and try to colonize it, in the 21st century.
Secondly, because China, North Korea, Iran and Russia are working together. A ‘bad deal’, would mean the President of Russia “high-fiving” with the leaders of North Korea, Iran and China, Rutte says.
And thirdly, because if Ukraine were to lose the war, Nato members would face “trillions” of extra spending to bolster their military, a “much, much higher price” than is being contemplated today.
Rutte adds that there is a commitment that Ukraine will become a member of Nato.
And if Vladimir Putin can be brought to the negotiating table, the important thing is to ensure a “sustainable peace”, Rutte says, and not repeat the peace talks of Minsk in 2014
For it to be sustainable, we have to make sure that Putin will never, ever, ever again try to get a square kilometer of Ukraine in the future.
Rutte is speaking at a breakfast organised by the Victor Pinchuk Foundation in Davos.
Pinchuk, the Ukrainian businessman and oligarch, explains that he loves it when the US president, or other leaders, talk about putting their country first.
If you put the interest of your country first, then it means national security is an absolute priority.
But that means you must not let our crazy, terrible enemy win in Ukraine.
Pinchuk adds that if that happens (and he believes it ‘definitely’ won’t), it would severely damage the national interest of other countries.
Also coming up today
There is a populist feel to Davos today. Even though he’s not attending this year, Donald Trump has loomed over Davos. And at 5pm local time the new president will deliver remarks to delegates via a live video link.
Before that we’ll hear from Argentina’s president, Javier Milei, and also receive a messsage from the Pope.
The agenda
7.30am CET / 6.30am GMT: Davos Ukrainian Breakfast
9.30am CET / 8.30am GMT: A special message from Pope Francis, delivered by Cardinal Turkson
10.15am CET / 9.15am GMT: Special address by Javier Milei, President of Argentina
11.30am CET / 10.30am GMT: A debate on tariffs
1.15pm CET / 12.15pm GMT: A session on action on Antimicrobial Resistance
3pm CET / 2pm GMT: A session on Global Risks 2025
4.15pm CET / 3.15pm GMT: A session on Can National Security Keep Up with AI?
5pm CET / 4pm GMT: Special Address and Dialogue with Donald J. Trump, President of the United States of America
