President Trump touts growth, walks back new tariffs at Davos

DAVOS, Switzerland — U.S. President Donald Trump on Wednesday issued a series of policy reversals and reassurances at the World Economic Forum, aiming to calm jittery markets while highlighting key points of his administration’s economic agenda, especially its aggressive use of tariffs as a core economic and national security tool.

In a Truth Social post released during the forum, President Trump said he would not move forward with new tariffs on European countries that had been scheduled to take effect Feb. 1, citing progress in negotiations tied to Greenland and broader Arctic security.

President Trump said the decision followed a “very productive meeting” with NATO Secretary General Mark Rutte and the formation of a “framework of a future deal” involving Greenland and the Arctic region.

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“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” President Trump wrote, adding that additional talks were underway regarding a proposed U.S.-led “Golden Dome” defense initiative linked to Greenland. Vice President JD Vance, Secretary of State Marco Rubio and special envoy Steve Witkoff will lead negotiations, Trump said.

The pause marked a notable shift after days of heightened rhetoric in which President Trump had threatened new tariffs on European nations that did not support U.S. strategic objectives in the Arctic. Markets had reacted nervously to the prospect of another escalation in trade tensions, particularly with the European Union.

Tariffs as leverage

Despite the rollback, President Trump made clear in his Davos remarks that tariffs remain central to his economic strategy. He argued that raising tariffs on foreign nations — rather than domestic taxes — has strengthened U.S. finances while reducing the trade deficit.

“Instead of raising taxes on domestic producers, we’re lowering them and raising tariffs on foreign nations to pay for the damage that they put,” President Trump said. He claimed tariffs had “radically reduced our ballooning trade deficit,” asserting that the U.S. slashed its monthly deficit by 77% within a year.

President Trump also framed tariffs as essential leverage in securing concessions from trading partners, repeatedly pointing to their role in reshoring manufacturing and influencing foreign policy outcomes. He said companies from Europe, Asia and North America are investing heavily in U.S. factories to avoid tariffs, calling the current wave of investment “levels that nobody’s ever seen.”

Factory construction is up 41%, the President said, and domestic steel production has increased sharply, with new plants under development across the country.

Growth and investment

Throughout his wide-ranging remarks, President Trump painted a picture of an economy experiencing rapid expansion driven by deregulation, tax cuts and trade pressure. He highlighted large-scale capital investment, particularly in manufacturing, energy and artificial intelligence, arguing that growth — not austerity — is the administration’s answer to rising debt.

“Growth is the way,” President Trump said, adding that tariff revenue, combined with spending cuts, would help stabilize federal finances. He said the U.S. has taken in hundreds of billions of dollars in tariff revenue and said that money is being used to strengthen national security and economic resilience.

He also emphasized energy production as a pillar of growth, pointing to record levels of U.S. oil and natural gas output and criticizing European energy policies that he said weakened economic competitiveness. The President argued that strong growth does not inherently lead to inflation, rejecting widespread concerns that tariffs combined with loose monetary policies could overheat the economy.

While acknowledging that global risks remain — including geopolitical conflict and economic shocks — President Trump struck an optimistic tone about the year ahead. “We’re poised to have an economy like no other,” he said, adding that the United States is positioned to outperform other major economies if current policies remain in place.