U.S. President Donald Trump said he would ask Saudi Arabia and other OPEC nations to “bring down the cost of oil,” casting the push for more crude output as a way to heighten pressure on Russia and help end the nearly three-year war in Ukraine.
“If the price came down, the Russia-Ukraine war would end immediately,” Trump told world leaders gathered in Davos, Switzerland, on Jan. 23. “Right now, the price is high enough that the war will continue.”
Trump’s entreaty for more production comes as fresh sanctions on Russian supplies that were imposed days before he took office have begun to bite. And though oil immediately fell in response to Trump’s comments, it’s not clear the Organization of the Petroleum Exporting Countries will heed the president’s call, given the cartel’s cautious moves so far to slowly unwind production cuts imposed in 2022.
Stocks headed toward all-time highs after Trump’s remarks. The drop in oil, which tends to ease concerns about inflation, pushed the two-year yield down.
Beyond oil, Trump used his remote address before the gathering of finance and business chief executive officers, central bank governors and political officials to air other economic grievances, criticizing European Union sales taxes he said treat the U.S. “very badly” and accusing banks of unfairly bypassing some conservative clients.
Trump also reiterated his threat to use tariffs to bring manufacturing back to the U.S., delivering a stark warning to European executives in the room: “If you don’t make your product in America, which is your prerogative, then, very simply, you will have to pay a tariff, differing amounts, but a tariff which will direct hundreds of billions of dollars, and even trillions of dollars into our treasury.”
Trump also said he would demand an immediate drop in interest rates, which he said ratcheted up deficits and resulted in what he cast as “economic chaos caused by the failed policies” of his predecessor, Joe Biden.
“Over the past four years, our government racked up $8 trillion in wasteful deficit spending and inflicted nation-wrecking energy restrictions, crippling regulations and hidden taxes like never before,” Trump said.
Federal Reserve Chair Jerome Powell, who faced frequent barbs from Trump during the president’s first term, has said the central bank will make its decision based on what’s best for the economy and independent of political considerations or pressure.
While presidents have traditionally refrained from directly commenting on the central bank’s policy making, Trump told Bloomberg News during the campaign that he should be able to tell Powell how he thinks interest rates should change.
