Trump is being taken seriously at Davos, but not literally

With stock markets nearing record highs and business-friendly picks for his cabinet, a conviction has set in the new US president might in fact usher in a golden age for business.

DAVOS // The word in Davos is: ignore the tweets. Executives gathered in the Swiss resort for the World Economic Forum this week keep repeating, like a soothing mantra, that Donald Trump is at heart a pragmatist who will avoid trade wars and regulations that make it harder to do business.

“What somebody’s saying is not necessarily what they’re going to do,” said David Cote, chief executive of Honeywell International, a global manufacturing giant with far more employees outside the United States than in it. With stock markets nearing record highs and business-friendly figures appointed to the cabinet (subject to senate approval), a conviction has set in that a man who came to power as an anti-establishment populist might in fact usher in a golden age for business.

“In the end if he knows the facts, he’ll respond according to the facts,” said Hideaki Omiya, chairman of Mitsubishi Heavy Industries.

The stakes are high for companies that have prospered during the era of globalisation, locating factories where labour is cheap and finding suppliers that can offer components at the most competitive prices.

Mr Trump has criticised the arrangements that allowed companies to locate their operations abroad, calling the North American Free Trade Agreement “a disaster”.

Companies should not be over-alarmed at the president’s “one-liners” and instead should focus on his cabinet nominees, said Jamie Dimon, chief executive of JPMorgan Chase. “I think that these very rational people will be very thoughtful when they go about the actual policy.”

Foreign companies say they are similarly relaxed; Nissan Motor’s co-CEO, Hiroto Saikawa, said he did not believe Mr Trump has any intention of severing trade ties that benefit the US.

Some political veterans say the Davos set is being naive. Larry Summers, a US treasury Secretary under president Bill Clinton, is puzzled by the shifting views on Mr Trump and cautions against “enabling” the new administration.

“I’ve been very troubled by the attitude of business people from the US,” Mr Summers said. “People who were terribly afraid of what this would mean for America’s place in the world are now hailing those who surround Donald Trump as great geniuses.”

Phil Levy, a senior fellow at the Chicago Council on Global Affairs and adviser to former president George W Bush, said executives should not entirely discount what Mr Trump says.

“Usually when somebody who’s been elected president makes threats, people take it seriously,” Mr Levy said.

Some Davos attendees were prepared to concede that optimism about Mr Trump is built, at least in part, on wishful thinking. “I don’t think anyone likes the unpredictability he brings to the table,” said Martin Eurnekian, a director at Buenos Aires-based conglomerate Corporacion America. “Everybody wants to believe that it’s mostly for show.”

* Bloomberg