Donald Trump's shadow extended over the World Economic Forum in Davos this week, despite his physical absence. His protectionist policies and "America First" rhetoric, particularly his threats of tariffs on imports, were a major topic of discussion among global business leaders.

Trump's past pronouncements, including his "offer you can't refuse" to companies importing into the US – build factories in the US or face tariffs that could raise "trillions" – continued to reverberate through the conference halls. This stance has created uncertainty in global markets, impacting investment decisions and supply chain strategies. The potential for tariffs to add trillions to import costs represents a significant risk to companies reliant on international trade.

The market impact of Trump's policies is multifaceted. While some US-based manufacturers may benefit from increased domestic production, companies with global supply chains face higher costs and potential disruptions. This has led to a reassessment of investment strategies, with some businesses considering relocating production to the US to avoid tariffs, while others explore alternative markets. The uncertainty surrounding trade policy has also contributed to market volatility, with investors reacting to each new announcement or threat.

Trump's approach stands in stark contrast to the traditional Davos ethos of global cooperation and free trade. His focus on bilateral deals and protectionist measures challenges the multilateral framework that has underpinned global economic growth for decades. This divergence has created tension between the US and its trading partners, leading to trade disputes and retaliatory tariffs.

Looking ahead, the future of global trade remains uncertain. Trump's continued focus on protectionism could lead to further trade barriers and disruptions to global supply chains. Businesses need to prepare for a range of scenarios, including increased tariffs, trade wars, and a fragmentation of the global trading system. The decisions made by governments and businesses in the coming months will shape the future of the global economy for years to come.