‘Frankly More Difficult’: Davos Diary

(Bloomberg) --

U.S. President Donald Trump jetted out of Davos, but not before igniting another round of international trade tensions.

Less than a week since inking an interim trade deal with China, Trump and his team took aim at European Union nations and the World Trade Organization.

• Trump threatened punitive action against EU members if they don't compromise on a pact before he faces voters in November. He argued the bloc is “frankly more difficult” to deal with than China.
• Treasury Secretary Steven Mnuchin dangled the prospect of levies on auto imports for countries that go ahead with a tax on digital services. Such threats helped convince France to postpone its plans to get a temporary truce. 
  • That still puts him at odds with U.K. Chancellor of the Exchequer Sajid Javid, who intends to go ahead with taxes of this kind in April.
• Trump said he has something “very dramatic” in mind to overhaul the WTO.

The upshot: Such barbs explain why those at Davos aren't declaring the all-clear for the world economy even as it shows signs of stabilizing after a year when the U.S.-China trade war drove growth to its weakest since the financial crisis.

My colleagues Josh Wingrove, Jenny Leonard and William Horobin deliver the full story of Trump's Davosian trade tirade. 

Who Is Talking Thursday

Temperatures predicted to be between -6°C and 8°C; depth of snow: 51 centimeters.
All times are local in Davos. Click here to watch the live broadcast.

• 10:15 a.m. | European Growth panel with Deutsche Bank CEO Christian Sewing and Italian Finance Minister Roberto Gualtieri 
• 2:15 p.m. | German Chancellor Angela Merkel gives special address
• 2:30 p.m. | Green New Deal panel with Dutch Prime Minister Mark Rutte and Greek Prime Minister Kyriakos Mitsotakis
• 2:30 p.m. | Future of Energy panel with Saudi Aramco CEO Amin H. Nasser and Siemens CEO Joe Kaeser
• 4 p.m. | Italian Prime Minister Giuseppe Conte gives special address
• Be on the lookout for Bloomberg Television's interviews with
  • UBS CEO Sergio Ermotti
  • Goldman Sachs CEO David Solomon
  • U.S. Commerce Secretary Wilbur Ross
  • German Defense Minister Annegret Kramp-Karrenbauer
  • IMF Managing Director Kristalina Georgieva
  • Siemens CEO Joe Kaeser
  • Singapore Prime Minister Lee Hsien Loong
  • Moelis founder Ken Moelis
• Friday preview | How can the world break free from single-use plastics? Join us for a discussion on Friday and DM us questions: @QuickTake

Catch Up

• The ocean between us | To the banking titans gathered at Davos, the trans-Atlantic divide is growing ever wider: Looking to expand their footprint, U.S. financial chiefs expressed nothing but optimism. The Europeans, meanwhile, were stuck grimly wrestling with the headwinds that have held them back for the past decade.

• CO2 stress | The bosses of some of the world's biggest oil companies discussed adopting much more ambitious carbon targets at a closed-door meeting in Davos on Wednesday, a sign of how much pressure they're under from activists and investors to address climate change. Meanwhile, Qatar's sovereign wealth fund plans to shift into greener assets in response to investor demand.

• Climate challenge | Bank of England Governor Mark Carney warned of mounting risks to the financial sector and the economy from climate change, and urged the U.S. to play bigger role. Here are the highlights of what top investors, executives and politicians in Davos have to say about climate change. 

• Bust up | Bob Prince, who helps oversee the world's biggest hedge fund at Bridgewater Associates, says the boom-bust economic cycle is over.
• ‘More profound than fire or electricity' | Google's chief executive officer has left no doubt in how important he thinks artificial intelligence will be to humanity: “AI is one of the most profound things we're working on as humanity.” 
• Speed read | Renault's chairman dismissed talks of changing the shareholding structure of the alliance with Nissan | Singapore Prime Minister Lee Hsien Loong said Asia is at a turning point | Cargill CEO said he is concerned about exports of U.S. agricultural goods | China's securities regulator is looking at the potential to raise the cap on foreign ownership | Barclays is sticking with its strategy | Listing Saudi Aramco shares abroad is “still on the cards.”

Davos Data Download 

 As the gulf between the rich and everyone else continues to grow, more than 100 billionaires are in Davos this week to rub shoulders with bankers, politicians and other grandees. The elite group, worth about $500 billion, includes regulars like Bridgewater founder Ray Dalio, Blackstone Chairman Steve Schwarzman and JPMorgan CEO Jamie Dimon. 

Quote of the Day

“I was worried about him, because he's one of our great geniuses, and we have to protect our genius,” Trump said about Tesla CEO Elon Musk. “You know, we have to protect Thomas Edison and we have to protect all of these people that came up with originally the light bulb and the wheel and all of these things.”

One Last Thing...

For the second year in a row, a Cannabis House has opened up in Davos, promising to be “a little more formal and more professional” than last year's, according to Jason Paltrowitz of OTC Markets Group, one of its sponsors. Meantime, inside the conference center, delegates got to hear the story of a company developing a hallucinogenic drug to treat addiction to opioids.

--With assistance from Iain Rogers, Tom Metcalf, Chris Reiter and Gem Atkinson.

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net, Craig StirlingBrendan Murray

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