Trump to the Davos Forum: We have begun a golden era for the United States economy

US President Donald Trump said on Thursday that the United States does not need any Canadian oil, gas, cars or timber, repeating his proposal that Canada become the 51st US state.

“We will demand respect from other countries… Dealing with Canada has been very difficult over the years,” he told the World Economic Forum in Davos, Switzerland, via video link. He promised that his country would witness a golden era during his reign, and began enumerating the economic measures he intends to take.

Below are the most prominent things Trump said on the economic front:

• I will ask Saudi Arabia to reduce the price of a barrel of oil, and this will contribute to ending the war between Russia and Ukraine.
• Saudi Arabia will invest $600 billion, and I will ask for it to reach $1 trillion.
• The decisions I issued within 3 days will have a very positive impact on our economy.
• The relationship with China is unfair due to the large trade deficit.
• It is foolish to allow other countries to take advantage of us while we accumulate debt.
• We would like to use clean coal, which is a great resource for factories and costs less.
• We will grant quick approvals to those who want to invest in the field of artificial intelligence in our country.
• The Europeans treat us badly without fear. They send us cars and do not take our cars.
• The European Union demands billions from our companies, such as Apple and Google, and we have complaints about the way they are treated, noting that the Europeans’ pursuit of American companies and imposing taxes on them is a worrying matter.
• The Europeans freely sell their products in our countries while creating difficulties for our products in their countries.
• America will once again become a meritocracy.
• My administration took action to eliminate all discriminatory policies, which did not make business sense.
• The American economy has begun to recover and investments in our country have increased since my success in the elections.
• I declared an emergency to fix the energy deficit and the United States has the largest amount of energy and gas and we will use it.
• Biden has lost complete control over what is happening in our country, and because of him we have suffered from inflation, deficits, and high public debt.
• I will demand that interest rates be lowered immediately.
• I will work through Congress to reduce taxes on producers and manufacturers as much as possible.
• Many and rapid measures were taken to reduce the cost of daily life and imposed a freeze on foreign aid.
• I will put an end to immigration to our country, declare a state of emergency, and we will return illegal immigrants to their countries.

Repercussions of interest cuts

Perhaps one of the most important things that Trump has focused on, and which will have repercussions, is lowering interest rates. Implementing it may lead to several direct and indirect economic effects, the most prominent of which are:

• Stimulating economic growth, as lowering interest makes borrowing cheaper for companies and individuals, which encourages increased investments and consumer spending, and companies may resort to expanding their operations and creating new jobs, which enhances economic activity.
• Increased inflation: If the economy is already operating at full production capacity, a rate cut can lead to higher inflation, as demand increases beyond supply capacity.
• Impact on the value of the dollar. Lowering interest rates lead to a decrease in US bond yields, which makes the dollar less attractive to investors, and this may lead to a decrease in its value against other currencies.
• Pressure on banks: When interest rates are too low, banks’ profit margins are affected, as the spread between lending and borrowing interest becomes narrow, putting pressure on their profitability.
• Rising asset prices. Lower interest rates prompt investors to look for higher returns in other markets, such as stocks or real estate, and this usually leads to higher asset prices.
• Increased debt, as low interest rates encourage excessive borrowing by individuals and companies, which may lead to debt accumulation and increased financial risks in the long term.