Since the early 1970s, the World Economic Forum has been the main platform for global leaders to discuss international economic issues.
Last year, Chinese President Xi Jinping addressed the annual meeting in Davos, Switzerland. This marked the first time a leader of the communist country participated in the gathering of the Western elite (since 2001 China has held a similar event, the Boao Forum — in the Hainan Province). Xi Jinping delivered a clear message. If America does not want to lead globalism, China would do it.
President Trump’s participation to the Forum this year means that America is ready and willing to play a protagonist role in the global economy.
Leaders such as Angela Merkel of Germany and Narendra Modi of India reasserted their support for multilateralism. However, their countries failed to adapt to the global economy, remaining bound by excessive regulations. This makes them less attractive to foreign investors.
In contrast, after reducing bureaucracy and lowering the tax burden for corporations, the U.S. increased its global competitiveness, relaunching itself as the catalyst for economic globalization.
Our interconnected world requires businesses to quickly expand abroad. The U.S. is one of the few countries in the world in which a foreign individual can incorporate a company online. In most of Europe, instead, it takes from several days to a few weeks to form a new business because the procedure is much more complex.
Since the U.S. corporate tax rate has been reduced to 21 percent, foreign investors can save 8 percent or more on taxes respect to countries such as Germany and India, which are levying 29.7 percent and 34.5 percent respectively in corporate taxes.
The strong economic growth generated by the tax cuts shows that overregulation is an impediment to global prosperity.
In Davos, President Trump will affirm that America is open for business following tax reform as approved by Congress.
Because of Trump’s deregulation, the U.S. is well positioned to maintain global economic leadership in the long term, thus distancing itself from countries with highly bureaucratic systems.
President Trump will need a multilateral approach to confront issues like international terrorism and nuclear proliferation. These problems require global cooperation. Therefore, U.S. commitment to multilateral institutions is essential to maintain constructive leadership in world affairs — and to protect American interests abroad.
After creating such a favorable business environment, it's time for the U.S. to attract foreign capital and investments. Davos is the best venue for President Trump to pitch America as the most business-friendly nation in the world.
Francesco Stipo is the President of the Houston Energy Club, a member of the National Press Club in Washington D.C., a Fellow of the World Academy of Art and Science, and recently joined the Bretton Woods Committee. Born in Italy in 1973, Dr. Stipo is a naturalized United States citizen. He holds a Ph.D. in International Law and a Master Degree in Comparative Law from the University of Miami. To read more of his reports, Click Here Now.
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