A race for industrial power is redrawing the global economy. Governments are offering vast incentives to lure factories and talent while wielding tariffs as tools of leverage and defense.
What happens when every nation seeks self-sufficiency while still depending on global demand?
This session was developed in collaboration with Politico.
This is a livestreamed session. Please arrive 15 minutes early as the doors will close at the scheduled time.
At Davos 2026, leaders from government, industry, and academia argued that the era of “globalization as we’ve known it” is ending, replaced by supply chains optimized for resilience, security, and strategic advantage. Egypt’s investment minister Hassan Elkhatib framed the opportunity for mid-sized economies as becoming competitive export hubs through infrastructure, predictable policy, and market access: Egypt invested “close to $550 billion” in infrastructure and leverages trade agreements opening “more than 70 markets.” Yet he warned that competing with China requires pragmatic transitions, including temporary protection: “There is no country in the world that can compete with China… with a zero tariff.”
Mahindra CEO Anish Shah described how firms can navigate volatility by concentrating bets: “think big, do less, execute flawlessly,” while localizing deeply enough to be welcomed rather than resisted. Johnson & Johnson’s Kathy Wengel emphasized healthcare’s regulatory constraints: resilience is not dismantling global value chains, but “reassemble those chains” with multiple suppliers and approved alternatives.
Carnegie Mellon’s Erica Fuchs argued for “national technology strategy” over “industrial policy,” focusing on critical technologies and the jobs and innovation capacity lost when manufacturing moves offshore. On Europe, panelists converged on strengths (technology, diversity) but flagged fragmentation, slow decision-making, and the urgency of defense and energy security.
Good afternoon everybody. My name is Jamil Anderlini. I'm the regional director for Politico in Europe. And welcome to this excellent session here at the World Economic Forum annual meeting in Davos 2026, which promises to be a truly momentous, truly historic Davos. Given all the headlines that are happening around the world at the moment. We are here at this session to talk about hard choices for industrial policy, and we have a bumper group of speakers, a large delegation and excellent panel here for you today. Welcome to those in the room. Welcome to those of us following along online. So let me first start by introducing our distinguished panelists, and then we'll get, get started on on the topic of the day. So next to me right here is, the Minister for Investment and Foreign Trade of Egypt, Hassan al-Khatib. Welcome, Minister. Thank you. Next to him, Anish Shah is the group chief executive officer and managing director of the Mahindra Group. Welcome, sir. Thank you. Next to him, Kathy Wengel is the executive vice president, chief technical operations and risk officer for Johnson and Johnson from the United States. Next to her are Natan Linder is the founder and CEO, I suppose, of, tulip interfaces. And last but not least, Doctor Erika Fuchs is a professor at Carnegie Mellon University. So today we're talking about industrial policy. We're talking about the changes that are happening in the global economy. Obviously, we have reached this incredible inflection point in history where all of the, the norms and the ideas of the post-war era and particularly the era of globalization since the fall of the Berlin Wall and the collapse of the Soviet Union are all under question. We're at this inflection point in history where all the things we've known, certainly in my lifetime, I consider myself a child of globalization. All of those norms are changed. And, and what comes next is, is unclear. But hopefully our panelists will help us to shed some light on what, what is going to happen in the context of supply chains and industrial policies. Obviously, governments, in many places are erecting barriers that have that have been torn down in the last four decades. And, since the pandemic, we've witnessed real, vulnerabilities in our supply chains. So I want to turn first to you, Minister, and get your perspective. I know you and I actually agree that we're in the we're in the era of deglobalization, if you like, or the at least the end of globalization as we've known it. So I'd love to hear from you. As a government of a, you know, medium sized, but a very important economy, balance between Africa and the Middle East. How are you responding to, some of these challenges to the tariff wars, to the to the trade wars that we're seeing? And, how does a country like Egypt, position itself in this current environment?
First of all, it's a pleasure to be here. I think, as I said, I agree with what you highlighted. I think the phase of globalization is phasing out. And we've seen the signs of that started in 2008. For countries like Egypt, what matters now is how to attract investments to manifest the new world that we're living in, the new world that we live in. The supply chain shift is a reality. It's resilience versus efficiency. The model that we've we're talking about now. So countries like Egypt needs to focus on competitiveness, on making sure that we're well positioned to attract the investments for corporates, industrial players, to use the country as a hub for exports. And what matters in this is this competitive nature and what we've been focused over the past year and a half is to build on one important thing. Countries will be differentiated based on their quality of infrastructure. So Egypt over ten years between 2014 and 2024, invested close to $550 billion in highly needed infrastructure, 22 new cities, digital infrastructure and ports, expansion of our ports capabilities and so on. The government that I belong to focuses on policy clarity, policy predictability, fiscal policy, monetary policy, trade policy. On the contrary to what you highlighted, we think openness. We think competitiveness, ease of doing business is the future for countries like Egypt. Why? Because we want to maximize our location, our advantages. When we talk about, again, industrial choices, we have 110 million people. We have, as I said, infrastructure. We have the people well trained and we can easily train them. We have the abundance of quality engineers. Then what industries we can really localize with competitiveness in Egypt. And if you combine all of this with trade agreements that we are sharpening, that open more than 70 markets. We have an EU partnership. We have three African free trade agreements that cover the whole of Africa. We have the Arab Free Trade Agreement, we have the US through the qualified industrial zones and the Mercosur for Latin America. This is the recipe that we're trying to follow in articulating our industrial choices for the future. But what matters is localizing and building industries for the competitiveness of what the country can offer, but building capacity for the surrounding regions, for the three continents that we are centered in.
Thank you. Minister. Can I move to you, Mr. Shah? You're you run a big global company based out of India. But you have operations in many places around the world. What, what is the what are you facing in this current environment? So it's all very well to say, you know, we're a global company. We believe in openness and free trade, but that isn't the reality at the moment. And you know, as tariffs throw up and come down sometimes less than they go up. What what are you doing to to manage this kind of volatility volatility in your business.
So I'll start again with it's a pleasure being here as an introduction. The Mahindra Group operates in 20 industries that constitute about 70% of India's GDP in 100 countries and with 350,000 people. So we clearly feel all the pressures that we see across the world, what we've been doing and telling all our leaders over the last couple of years is think big, do less, execute flawlessly. It is counterintuitive, but in uncertainty it is better to accelerate. It is better to create that strength and lead from strength, because you need to be able to influence in a bigger way, and therefore you cannot be a smaller player in any industry. You got to be a leader in the industry. So the message to our business is, is accelerate but do less. So focus on a few things that we really have a strength, a right to win and execute flawlessly. Do them really well and that puts us in a better position. We continue to grow at, fairly dramatic pace at this point, across almost all our businesses. And, that is.
Orienting back domestically into India and saying, look, this is our home turf, this is our country. We can do better here. Or are you, further localizing in all the countries that you are around the world?
Both. And we realize that we have to be local in markets around the world to play in a bigger space there. But what we are doing is looking at each country and saying, can we play here in a much bigger way? Can we get a ten, 15, 20% market share in industries that we play in, in that country? As compared to being there with the 1% or 3% market share. So that is a change that we've made in terms of how we play. And that is helping us because that is helping us, create greater momentum, greater ability to influence and being able to drive growth with it.
Can I push you slightly and ask, are there any examples where, rising nationalism at the political level, rising maybe even at the, at the populist level has made you decide this is just, too difficult. We've had to pull out of different markets or different countries.
We actually haven't seen that anywhere, because in markets where we play, we often play with local brands or we have localized production as well. And, that has helped us in terms of Mahindra being someone that understands consumers in that market, in many markets. We have been there for a long time in the US. We've been there for over 30 years now, and we set up an auto plant for off road vehicles, which was the first plant set up in Detroit after 25 years. So.
We were great again.
So we were welcomed in the US at that point in time so that, localization helps significantly.
Thank you very much. Kathy, I'd love to turn to you, chief risk officer. That must be a busy, busy, I mean, you have several titles, but that one must be, keeping you very busy at the moment in your, sector pharmaceuticals. It's just really very, very difficult to try to untangle yourself from global supply chains that, could you tell us a little bit about some of the challenges you're facing? And I'd love also to, to, to check with you if you found that as a, as a US based company, are you seeing a backlash to some of the, you know, in the US? It's, you know, we're hearing more about, you know, America first. Are you finding that in other countries, other regions that that is causing a bit of blowback, anywhere?
So thank you for the question. It's great to be here with this panel. So let me start from the lens, in fact, of health care, because health care is a is highly regulated industry. So it's not something where even if we wanted to, I could, you know, pick up a site or open up a plant in six months or other other elements. It takes usually longer to get sites approved by all the health authorities that you will supply from it than it does to actually build it. So we put those in the context. Regarding the policy and changes, I'd start by saying that the pandemic really accelerated. We think a lot of those changes. The good news it is it really educated, governments, economies, on how supply chains and complex supply chains really work. I think there was a lack of good dialogue back and forth prior to that, aside from with the health authority, but the general flows were not well understood. So I think it's brought us closer together. The flip side of that, though, is it has brought out an accelerated some more nationalistic tendencies. Those are understandable. We all are part of economies. We accept our expect our governments to provide health care and do other things for us. But health care has evolved over decades, largely in global value chains. These are high science, highly complicated things to synthesize molecules and medicines to make, biologics, to do cell therapy and gene therapy. So the way we are approaching that, is, number one, we have global value chains. But resilience to us, it's not about taking those apart. And solely regionalizing them, for example, but it's how are we able to be more agile and reassemble those chains and use chains and use components of those supply chains to serve different market needs? So that to us means having, more resilience, more choices, partnering differently with not only our own chain, but with external manufacturers that may help extend our reach, multiple suppliers. Each of those things, though, takes from months to years to get approved. So it is, it is a little more complicated to do that. But we are in a global business. Patients are global, and we're very, very committed to that. To your last question on on blowback, look, I think always, you know, we are a very proudly, 140 year old company, pioneered the concept of sterility and in healthcare and surgeries, but certainly when we are talking with governments around tariffs and don't please retaliatory tariffs and all those things as an American company, you know, we feel we have a responsibility to also represent our country. But to, you know, to be good citizens of the globe. And so for us, it's important to be at the table, no matter what government we're working with, to have dialogue and to help improve health care.
Natan, you've, you've got a company which is, looking, at, you can explain it yourself, I'm sure, than I can, but, that is looking at, industrial processes that is using technology to to automate many, factory processes. What are you finding in this moment of sort of, great. Disruption in, in, in industry around the world? Are you finding more interest in, higher technology or are you finding, countries, governments, policy makers looking to, create more jobs and thus more resistant towards, towards some of the high technology solutions that we see in industrial policy, industrial practices.
So it's great to be here. And thanks for the question. The first thing I say, I'm not a policy expert, so come from technology. And we're focused on helping organizations build, production systems that fit this era, you know, where you need to treat every single one of your employees as a knowledge worker. In fact, this idea of knowledge work, we should stop using this term because as soon as you use it, you define the boundaries of who is and who isn't. And when you think about like that, that that even before you go to technology and policy, you understand that, you got to focus on the people doing the work, and turn their domain expertise into, you know, new, new types of systems that allow them to transform their organization continuously. And I think the the challenge for policy, most of it, and it's going to sound a little bit, controversial potentially, is legacy, trivial policy, like, for example, in the US, once more chips to come back to the US, we'll have a chips act. We need more infrastructure. There will be an infrastructure act, or there will be investment in sort of in Europe where a global company or in Europe, it could be like we need more, vocational education. So you'll invest in that. So those are to me are standard policies and they're good. However, no one is investing enough in transforming the workforce to, you know, the next decade of, artificial intelligence driven workforce that needs to both live in the digital and the physical space and support such production system. And I think that should be, where policy thinking, including partners in academia and partners in industry like, Johnson and Johnson, here's a great example of a multinational that is very complex, that needs that. And of course, the stakeholders and government. So, you know, not being a policy person, this is my suggestion to where policy should go.
Thank you. That's great. Doctor Fuchs, you have done, a lot of research. I know, about, supply chains and when, advanced economies outsource production to to, other, other developing economies. The biggest and most important example would be China, obviously, over the last few decades. What does your research say about what that does to the advanced economies that are that are doing that outsourcing?
Perfect. And I want to end on the answer to that question. And I want to make two points to what you said in the beginning. The first is I want to talk about, that I don't like the term industrial policy because we don't want to support industries. We want to support the technologies that are going to cut a path across them. Right. And so in not supporting industries, what industries are already incentivized to do by the market, they should do and that that should be part of any country. But national technology strategy or even harder critical and emerging technology strategy. So what is critical? What do we what do we need for national security? How do we decide what we need? What do we need for economic, whether that be competitiveness or power? And what do we need for the well-being of our citizens? Those assessments help us decide what we even want to manufacture in our supply chain in a domestic context. The second is, I want to point out that while there's a lot of attention now on nationalism, by midway through the pandemic, there was actually more protectionism globally than any time since World War two. So this started then, and it was about countries realizing that they have strategic interests. Right. And suddenly if they can't partner with other countries for one reason or another, whether that be the health of their citizens or otherwise, then they need a way to respond. And then the last to your question is that I would in our work, we found that when firms moved manufacturing overseas, they lost incentives to produce the most advanced technologies in the United States that also had well-paying jobs for high school educated workers, where they were part of the innovation process, and those were strategically necessary for the Department of Defense, for the future of competing with value in the economy. But they couldn't manage in the public market to do that in the short term. And that's the role for government.
And that, I think, is really, in many ways the crux of this. I was at a dinner discussion. I'm sure all of you were talking about similar topics, but last night we were talking about, this reversal in globalization and whether that was a, a policy. I mean, it was a Donald Trump thing or whether it is a grander sort of forces that are that are coming into play. And my personal view is that Donald Trump is more a symptom rather than the cause of this reversal in sort of unalloyed, untrammelled globalization for exactly the reasons that your research has found that, actually, what's happened for there haven't been universal winners from globalization and free trade over the last few decades. I was, contemplating, as you were all speaking, the fact that we're here in, we're here in the Schengen zone, not the European Union, but we're in we're in Europe, the continental Europe. And I'm based in Brussels, and this is a panel, and none of you are European. And so I actually think because so much of the discussions I'm involved in and day to day are particularly in Brussels, come, you know, it's always about Europe. It's always sort of lamenting, you know what? You know how how terrible things are in Europe. That's what Europeans like to do. I'd love to get a perspective from each of you. As long as short as you like on on sort of what you observe, of Europe, your, your trading with Europe. You're, you're dealing you're, you're invested in Europe. But what do you see as the challenges, maybe the opportunities for, for Europe itself, since we are here in, in this continent. Minister.
Can I start at least commenting on at least the debate on industrial policy, at least because I think it's very important and I think the points that you raised, the world that we're in is very complex. And it's not easy for a country like Egypt, as you rightly mentioned, we want to position ourselves what the reality of the world today that countries, even the US, one of the most again, developed economies in the world, would like to bring back industry. But the reality of the matter is today, China became at a size where you need to question what are what industry can look like. I mean, the EV industry is completely dominated in China. 80% of the supply chain is completely dominated in China. Does this mean that we should not do an EV industry in the Middle East? That's a question I would say. No, we should. Why we should? Because again, the raw materials are in Africa. The again, most of the cobalt, the lithium, the consumption, the population, the connectivity to Europe, the Middle East. And again, we need to do this in collaboration with other countries that have the capabilities. So the the energy intensive part could be in Saudi Arabia. The other parts could be in Morocco, parts again, this accumulation of the rules of origin. But we need to recognize that in that journey this is not going to be the cheapest option. China today, if you look at their capacity in solar panels, their production capabilities is 1000GW. The total world consumption last year was 600GW, and they've consumed more than half of that. Should we develop an solar panel industry in the Middle East? Again, I talk about the wider Middle East. Absolutely, yes. Why I'm saying this because that's the future of our country, Egypt. Again, all of our the private sector are telling us we can produce literally 1000GW over the next 20 years, only from the Western Desert. We have the silicon, we have what it takes. But again, you need to bring that supply chain. So going back to your point, this complexity in the supply chain, we need to bring that technology from China. We need to work with these dynamics. But the complexity in the world that we're in that we're doing protectionism, that does not help bring some of those industries to these markets. We're also seeing a major, you know, again, when we talk trade remedies, there is a lot of safeguard measures that are taking across the world today that are not in, in, in my again, at least observations are not reflective of what needs to happen, but it's just a protection for the sake of protection. And that's where we need to navigate these dynamics. If we want to do an industrial policy, we need to think about the future of our countries. We need to build this in a way that is competitive. But if you look at the dynamics today, we will never be as competitive as China. Reflecting to your point, in Europe, we have these discussions with Europe. I think, again, Egypt, our largest trading partner, has been always the EU. We we're very proud of the EU partnership. And we tell our European partners that you need to come and invest. But Europe is entangled with again bureaucracy, slow decision making. And again I'm saying this. Why. Because I would want to make sure that my next 20 years partnership investments trade to be balanced. I want Europe to be still the largest trading partner with us as a trading partner. I want China as a trading partner, but I do not want to be overexposed to one market. So that's how again, that's what we're seeing in Europe. But it's not an easy to navigate this.
As I mentioned, I live in Brussels. So bureaucracy. Tell me about it. Maybe I'll jump to the end and mix it up a little bit. But what, Professor Fuchs, what would you say? I know you work, look at America in particular, first and foremost, but what would you say your diagnosis and maybe recommendation would be for for Europe in this new world and this new transition phase we're going through?
Yes. And I'll do Egypt to please. So, first, I think, for Europe, there's an incredible challenge right now in Ukraine. And I think that really speaks to how we want to think about critical and emerging technologies and national tech strategy. So on the one hand, there's an energy security issue that emerges because of what's going on in Ukraine that's been there, but is even more emergent with decline in trade of resources coming from Russia. And I don't think you care about where you're getting wind or solar from, as long as you can get it as fast as possible and be as independent as possible as quickly. I don't think it matters if it comes from China or anywhere else, as long as you can build it out now, right? In contrast, I think with drones with kinetic capabilities, being able to take those out, you probably need to be able to produce those yourself, and you need to be able to produce them yourself fast. I think similarly in the Egypt context, when we think about cobalt and batteries, I've become quite interested from the strategic perspective of the United States and cobalt free batteries. And the reason is actually multifold. And Egypt needs to know that. Right? So from the perspective of fast charging, nickel cobalt manganese batteries are going to have less lasting power over time. It could be through fast charging that they actually decline over time within a year to being able to be recharged. Whereas an LFP battery, I can do that type of fast charging. And I also don't require cobalt. So so from a perspective of each of us figuring out our strategic advantage, I think that's quite important. I want to come back to end, though, on Europe, because I think when we think about alliances and comparative advantage, I think there's an incredible strategic interest between the US and Europe on combining knowledge from the perspective of if you think about Imec, you have an incredible capability to produce, next generation semiconductors and experiment in that. We should be leveraging that in the United States and finding other such collaborations.
From your lips to Trump's ears. Natan.
Yeah, I want to compliment this. And my perspective on Europe is Europe was the second market we went into after the US, where startup started in Boston. So for us, you know, flight is six hours across the pond. You know, you're right there. So we're based out of Munich in Budapest. And that informs a couple anecdotes I want to share that explains the situation as we see it on the ground in Europe. Europe has great tradition in manufacturing. But it's expensive and complicated to operate in. It's fragmented and, as a result, you know, tough to navigate, lots of different policies. We are experiencing supply chain relocation. So I'm sure, we have the CEO of Tech Mahindra here. He can he can attest to that, that India is going through a similar situation where, you know, the first iPhones have been exported from Chennai to China last year, and that's because they managed to do supply chain relocation. I don't think Europe has learned how to do that, despite the fact that it has two huge advantages. One is called central Eastern Europe. That has a great potential for, know how technical experience tradition in some some, some industries and expansion space and at the same breadth North Africa, which is, you know, we were in other sessions today and, and yesterday and talk about the hope of Africa as a new place to operate in. And so from that perspective, I think, Europe needs to consider that the last point I'll make on, on, on Europe is, unfortunately, as it comes to technological leadership, it has been slow. And, and I think, it has come to roost. And what I mean, everyone knows. And you met you made the point on Ukraine that aerospace and defense manufacturing is now critical, and that supply chain is about national security. And everybody knows the investment. The German, the French government and so on have made. And this the type of material for war is made in, in the continent. So if you don't deal with the first problem, it's actually very risky. And in that sense, you know, you need to think about what drives that is things like, data sovereignty and how quickly you can change policy to start enabling that, I think is critical for European, you know, future, not only just economical, but just even from a national perspective. And I'm sorry if this is a little bit of a downer, but like you ask about this and it's important for everyone here. So that would be my perspective on Europe.
Thank you. Kathy, you're.
Sure I'll add a few points. I'm a big believer that sometimes your greatest strength. The other side of that coin is your your weakness. And I spent a decade in Europe. My husband is European. And I, you know, the greatest strengths clearly, is the the diversity, the, the knowledge that the opportunity to leverage from different cultures and countries and assemble ecosystems of suppliers and opportunities where you can take the best of every, every culture and make something better. The flip side of that, though, is because of long history, because of the complexities of the histories of the nations, are millennia longer than the history of the EU. Right? That I don't believe there's yet the balance between the national and the EU. And so what's happened is a proliferation of regulation, that I think now, from what I'm hearing and seeing, right, the countries have have made their voice known to the European Commission. The European Commission is undergoing the simplification initiatives. And I think that's very important because for Europe to stay as and I'm talking here EU but really to to be continue to be major players, the simplification is needed. And then also the the elements of the Draghi report. I'm also very pleased to see you know and hear from from commissioners the seriousness with with which that's taken. I was hearing earlier today, you know, the same number of startups occur in Europe as in the US up to a certain point. And then they all go elsewhere for funding that that is not sustainable. So that has to be solved. And that should be what can be solvable by, by the countries working together versus every nation on its own. So I think it's evolving in that balance. But I also agree we have to stay partners. We are on one planet. We are all in beings. The rights for human health and for our planet. We have to be able to work together, across that.
If you're quoting the Draghi report, you've definitely spent quite a lot of time in Brussels. That is on everyone's lips and every conversation and none of it being implemented, unfortunately so far. Mr. Shah, your your you are deeply, I know, invested across Europe and, I'd love to hear your, analysis, your perspective and maybe some recommendations for my, my friends in in in the rain in Brussels.
So this may be a surprise based on the conversation so far, but we are very positive on Europe. And,
What way. Tell us.
I will. So we have, a number of key customers across a few industries in Europe. And in terms of what we see, they have tremendous strengths. One of the key areas is technology. And I don't think Europe has leveraged that as much. We are starting to work with, some of the European companies with regard to potential collaboration, where we can tap into the India market, leveraging the strengths that Europe brings in technology. We also see a very impressive set of leaders in Europe. I was in, smaller group meeting with President Macron just before this session. And, he was very clear about things that need to be done to simplify regulation in Europe and to make Europe more competitive. Been in separate sessions with him in the past as well to look at investments in France. And, there is a significant change in terms of how government is looking at it. It may seem slow, but we can see a clear intent around it. So we are looking at investments in Europe. We're looking at partnerships in Europe for the world. And we see tremendous strengths in companies in Europe today.
Very interesting. I want to, give, people in the room a chance to ask questions to to our panelists in, in a, in a minute or two, if you have any. But first, I want to maybe return to you, minister and ask, what do you very hard to to answer this, I'm sure, but from your perspective, what do you think comes next? As I said, we've got the post world order. We've then had globalization. We agree that that era is over. Are we going to see an era where it's dog eat dog, where every, country is trying to fend for itself, where where global trade starts to decline and it becomes interregional? You you kind of hinted at this when you mentioned the need for electric vehicles just in the Middle East. And so are we going to see greater regionalism and, and, breakdown or what do you think is, is coming next from the perspective?
I think it's a shift of the investments, the global investments to different regions. And I think the Middle East is one of those regions that, in my personal view, will benefit. It has the potential, it has the people. It has the the capabilities in terms of capital across the regions, from the GCC to the North Africa, where you have the larger populations. And again, the the ambition to to really be positioned and to really to be an industrial hubs. So I'm actually on the positive trajectory to that effect. And I think I want to go back to Europe. What I meant by Europe is we have a partnership with Europe, and Europe has all the advantages, but they need to start thinking of producing and shifting that some of that technology to be able to maintain their competitiveness in the future. And this partnership is existing, but we need to move it faster for the benefit of the European people, for the benefit for our economies, for the people of Egypt and other countries as well. So for me, it's it's that shift that needs to happen, that move of investments that over 3 to 4 decades, most of the FDI was in Asia. Now you will have to see different shift. And I don't want to call countries by name, but there are key countries that are actually targeting massive FDI numbers in the Middle East, in North Africa, because we're shifting the game, we we are positioning ourselves as the place, as hub for industry, very competitive, very good location, having the energy resources. So when we talk about artificial intelligence, data centers, hyperscalers, the Middle East should be the winner.
But are you looking for that investment primarily from within the Middle East and North Africa, or are you still looking for the American investors? The European investors is the sort of traditional approach to FDI.
Look, I want it to be diversified and I that's what I alluded to. We want the US investors to come capitalize on that opportunity. We want the Europeans and we want to be smart in bringing the technology from the Chinese to the Middle East as well. That's exactly what we're doing. You have to use sometimes the tariff to, to, to get them to produce, in your market. Because today, if I want to localize an EV industry in Egypt today with is again, we have a tariff for EVs. Zero. There is no way you can have an industry today. There is no country in the world that can compete with China with an EV with a zero tariff. Then you need to play with the tariff in a way that you can bring them, and you have to articulate the incentives. I don't believe in tariffs. So that tariff needs to be transitionary, but you need to make sure that you localize and bring the know how and the technology to your market.
I just want to add that, we see Europe also reaching out and creating alliances. So Chancellor Mertz, with 30 CEOs of large German companies, was in India last week. And, they are clearly looking at stronger ties with India.
And I.
Think European Chancellor.
Is going to be there.
She's going to be there next week or sometime soon. And she was there a few months ago as well. And we seem to be on the cusp of, EU, India FTA as well. So there are lots of positives.
The cusp in Europe can be quite a long time.
My sense is it's much closer than we think.
And I trust you.
Yeah. I would also add your question about globalization and flows. I mean, last year global trade increased. It didn't decrease. But what happened were a lot of the flows started to realign. I think it's very hard to you. The genie's out of the bottle in that we talk to each other around the world. We communicate with each other. Our kids today have friends that are halfway around the world. They've never met, but they meet through gaming and they so the the world is interconnected. The question is for each economy, you know, what are the choices you're making and who you want to partner with most closely to improve your national or your regional interests. And so I think we'll continue to see this. You can call it rewiring or reassembly. But you know here all the agreements the EU is signing now. They're not signing fewer agreements, they're signing more agreements. So I think it's just we're entering a new it's just a new a new phase, a new a new era, maybe a made up word there. But it's a, it's a, it's a new way.
Want to give maybe we have time for 1 or 2 questions. So maybe one there and then one there. If we have time, I'll come to you, ma'am.
Minister of investment, European projects, Romania. I would like to address especially to, professor the question because, I mean, theory has been shaken these days. And I will put it this way. Industrial policy. Although you hate the term. Yeah. Niche is better or volume is better. I mean, what would be the strategy nowadays in terms of where in the value chain should countries be placed? Shall we try to control the value chain or, you know, come up with a, a niche, particular, particular niche that would make indispensable that particular country. If you can reflect on that.
Yeah. I'm going to I don't think it's the right question. I think the question is what are your national objectives and how do investments and policy related to technology advance your strategic interests? And I gave that energy security versus drones example. But I think what I was going to say to the conversation that had been going along here, which speaks also to your question, is, I think every country needs to come to a better understanding of the needs and desires of their people. And I think when we think about that, there is for no bad reason, right? Policy makers stand up there and say, we're going to have a great semiconductor investment and there's going to be more jobs, right? And there are right. There are operator and technician jobs, and there's a certain number of jobs, or we're going to move towards, more, you know, a different type of investment for energy, right? The European wind and solar example. But but what are the implications of that for the people? And the problem is, is that policymakers aren't trying to lie to their people. In my opinion, they don't know. Right. And so how can we have these strategic, forward looking assessments for countries so that they can communicate the legislators or the leaders to their people the consequences and facilitate those shifts that they are trying to do for the strategic advantage not only of their national security, not only of their economy and their economic power, but also of their people, including their health and their jobs.
Can I add a quick reaction to that? I think, if you don't think about it through niche or focus or those terms, if you think about it from trust and transparency perspective, and this is what I've been hearing from sea levels the past, say, 18 months, because the world became this sort of, sequence of black swan events, one after the other, maybe, maybe longer, you know, kind of stopped counting. It's like flocks of black swans. So people understand that while supply chains are not completely getting untangled, they are changing. And so they're ready to make moves, but they don't know where to go. So what they want is the, the, the, you know, and we had a letter from our work group at the WAF, two policymakers saying like, tell us what you're going to do so we can trust so we can decide where to put the next factory, because if the target is moving all the time, they don't know how to invest. And unfortunately, in supply chain, there's a lead time that is long and complex. And if you don't get it right, you're in trouble. I mean, your company would be in trouble.
Can I just quickly, quickly disagree?
I want to.
Give this I want to disagree because I'm two for two on disagreeing.
I'm just relaying what sea levels are the CEOs are telling us.
So I don't think they're black vessel. I don't think they're black swan events. We knew there was going to be a pandemic roughly in another 100 years. We knew that there was the grid was not very resilient. In Texas. We know that we're having more severe weather. And so my question is we I don't think anyone who had ChatGPT and was developing it inside was going to be surprised by deep tech or ChatGPT. So I think these are predictable shocks. They are not black swan events. But that's anyways, now I'm done. So.
How fast can you ask a question and can it be a yes or no question? Probably. I think we'll, we'll we'll not have time, unfortunately. But, I want to just thank this fantastic panel. The fact that we didn't even have time for many questions is, I think, a testament to the level of, agreement and or disagreement. Disagreement. And that's what we want here at the World Economic Forum. That's what makes this event so special. Thank you all for the recommendations. I'm going to go back to Brussels, with a whole fresh crop of, suggestions for my eurocrat friends. I want to thank everyone at home who's been watching us. Everyone in the room. Thank you to the World Economic Forum. Goodbye. And see you next year.
Thank you.