Volkswacht Bodensee - EU, China warn against trade friction at Davos after Trump return

Trump returned to the White House on Monday, and while he may not be physically present in the Swiss Alpine resort of Davos, he is the elephant in the room for the executives and leaders hobnobbing at the annual World Economic Forum.

With Beijing and Brussels facing some of the biggest risks from the return of self-professed tariff-loving Trump, China's Vice Premier Ding Xuexiang and European Commission President Ursula von der Leyen took to the stage first at the forum.

"Protectionism leads nowhere and there are no winners in a trade war," Ding said, without mentioning Trump directly.

Trump threatened on Monday to impose tariffs if Beijing rejects his proposal to keep Chinese-owned app TikTok online on condition that half of it is sold off.

China is taking a cautious approach to Trump and after the TikTok threat, Beijing said it hoped the United States would provide a fair business environment for Chinese firms.

After Chinese President Xi Jinping spoke to Trump by phone on Friday, he said he hoped for a "good start" to relations with the new US administration.

Meanwhile, von der Leyen took a conciliatory tone. She said the EU's "first priority will be to engage early, discuss common interests and be ready to negotiate" with Trump.

"We will be pragmatic but we will always stand by our principles, to protect our interests and uphold our values," she said.

The European Commission president also stressed that Europe "must engage constructively with China -– to find solutions in our mutual interest" despite escalating trade tensions between the two.

Brussels has provoked Beijing's ire with a raft of probes targeting state subsidies in the green tech sector, as well as slapping tariffs on Chinese electric cars.

In an apparent reference to the European Union measures, Ding warned against "erecting green barriers that could disrupt normal economic and trade cooperation".

- More trade deals -

On the campaign trail, Trump said he would impose extra customs duties on allies including the EU, as well as on China.

After his inauguration, Trump raised the possibility of imposing 25-percent tariffs on Canada and Mexico.

Von der Leyen reiterated her commitment to free trade during her speech, pointing to recent EU deals with Switzerland, the South American bloc Mercosur and Mexico.

She also said she and Indian Prime Minister Narendra Modi wanted to "upgrade" their partnership.

Trump announced the United States' withdrawal from the Paris climate accord, which von de Leyen defended as the "best hope for all humanity" and vowed: "Europe will stay the course."

Ukraine is also keeping a very close eye on what Trump's second mandate will involve.

Ukrainian President Volodymyr Zelensky is expected to call on world leaders and company executives to maintain -- and even ramp up -- their support for his country's war against Russia.

Zelensky said on Monday he was hopeful Trump would help achieve a "just peace".

Embattled German Chancellor Olaf Scholz was also to address the Davos forum, likely his last as leader ahead of elections next month.

Also speaking on Tuesday will be conservative leader Friedrich Merz, the favourite to succeed him as chancellor.

- 'Better understand' Trump -

Middle East conflicts will likewise be high on the agenda as Israeli President Isaac Herzog and Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim al-Thani speak in separate sessions during the first full day of the forum.

As a fragile ceasefire holds in the Israel-Hamas war, the WEF will host a discussion on how to improve aid delivery to the Palestinian territory of Gaza and how to kickstart the reconstruction and recovery after heavy bombardment.

Despite suggestions Trump's return would overshadow the forum that began on the same day as his inauguration in Washington, WEF President Borge Brende said the US leader had brought fresh attention to the gathering.

"It has increased the interest in Davos because people feel they need to come together to better understand what's on its way," Brende told AFP in an interview.

T.Suter--VB