India's Modi defends free trade as the U.S. raises tariffs
Indian Prime Minister Narendra Modi warned Tuesday that the recent wave of trade protectionism, in which governments raise barriers to free trade between nations, is "worrisome."
Modi delivered the warning in a speech Tuesday at the World Economic Forum in Davos, Switzerland, just hours after the U.S. government of President Donald Trump approved tariffs on imported solar-energy components and large washing machines in a bid to help U.S. manufacturers.
The Trump administration said the decision to place tariffs on imported solar-energy components and large washing machines reflects the president's pledge to put American companies and jobs first. Most imported solar modules will face an immediate tariff of 30 percent, with the rate declining before phasing out after four years. Leaders in countries including China have denounced the tariffs.
"Forces of protectionism are raising their heads against globalization," Modi told a crowd of business and government leaders at the World Economic Forum in Davos, Switzerland.
Without directly mentioning Trump or the U.S., he said "the solution to this worrisome situation against globalization is not isolation."
Modi quoted Mohandas Gandhi to drive home his point: "I don't want the windows of my house to be closed from all directions. I want the winds of cultures of all countries to enter my house with aplomb and go out also."
IMF Managing Director Christine Lagarde, Presidents Paul Kagame of Rwanda and Emmerson Mnangagwa of Zimbabwe, and former U.S. Vice President Al Gore attended Modi's speech.
Modi was meant to be the event's highlight until Trump decided to come as well. Trump is due to speak Friday, and the tariffs his administration approved this week will overshadow his arrival.
The tariff issue isn't likely to die down soon, according to a report from Carter Driscoll of B. Riley FBR.
"Both South Korea and China have denounced the tariffs, indicating the countries will defend their national interests through the World Trade Organization," Driscoll wrote in the report.
Modi's speech follows on from Chinese President Xi Jinping's address to the Davos elite at last year's event. Xi portrayed his country as a champion of free trade on the same week Trump was inaugurated president.
Swiss President Alain Berset set up the stage for Modi, appealing to the hundreds of people in the crowd: "Let us make 2018 a year in which we overcome the phase of hand-wringing and self-criticism, in which each of us works to promote social inclusion."
Other Davos participants spoke out against the tariffs, with Frank Appel, CEO of Deutsche Post DHL, telling an audience at the World Economic Forum Tuesday that the move will hurt exactly those who Trump is ostensibly trying to help.
He said: "Even if the U.S. does more protectionism, consumers will buy from different places and who pays the bill? All the employees in the U.S. finally."
Tidjane Thiam, the CEO of Swiss bank Credit Suisse, said he remains bullish on global trade despite the tariffs decision.
He said: "We will need to see how it impacts global trade, how other trading blocs react to that, but I remain optimistic. I think we are in exceptionally favorable context."
