Mnuchin fires back at trade critics
Washington – — The Trump administration pushed back Friday against widespread complaints against its aggressive America First trade policies and urged the International Monetary Fund to do more to combat unfair trade practices.
Wrapping up two days of talks, finance officials from the world’s 20 most powerful economies said that they had not reached any breakthrough on how to calm trade tensions between the United States and China, but all participants agreed that it was important to coordinate other economic policies as much as possible to preserve the strongest economic expansion since the 2008 financial crisis.
“We have to keep this group working together,” said Nicolas Dujovne, the Treasury minister of Argentina. He noted that in addition to rising trade tensions, the G-20 finance officials focused on two other threats to growth from geopolitical risks and rising interest rates as the Federal Reserve and other central banks accelerate rate hikes to guard against inflation.
Dujovne met with reporters Friday to summarize talks that the G-20 nations had held as a prelude to the spring meetings of the 189-nation International Monetary and its sister lending agency, the World Bank. Those meetings will conclude on Saturday.
The United States was represented at the talks by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, who was attending his first G-20 gathering after taking over the top Fed job from Janet Yellen in February.
In remarks Friday, Mnuchin said the Trump administration was convinced that unfair global trade practices impede growth in the United States and other nations, “acting as a persistent drag on the global economy.”
He called on the IMF to go beyond its traditional role as an emergency lender for countries in financial crisis and strengthen its monitoring role of individual country’s trade practices, especially nations running large trade surpluses.
“The IMF must step up to the plate on this issue, providing a more robust voice,” Mnuchin said. “We urge the IMF to speak out more forcefully on the issue of external imbalances.”
While Mnuchin was urging the IMF to take a tougher stance on trade, officials from other nations were urging the United States and China to step back from a potentially devastating trade war.
“The larger threat is posed by increasing trade tensions and the possibility that we enter a sequence of unilateral, tit-for-tat measures, all of which generate uncertainties for global trade and GDP growth,” Roberto Azevêdo, a former Brazilian diplomat director-general of the World Trade, told the IMF’s policy committee.
Other nations used this week’s meetings to sound misgivings about the tough turn in U.S. trade policy. In recent weeks, the Trump administration imposed tariffs on imported steel and aluminum and threatened to slap punitive tariffs on up to $150 billion in Chinese products. China has responded by threatening to tax U.S. soybeans and other products.
French Finance Minister Bruno Le Maire warned on Friday that American tariffs on steel and aluminum imports could lead to retaliation by other countries and “a significant risk that the situation could escalate.” He said that “tensions between the US and China have taken a worrying turn.”
Despite the trade disputes, the global economy at the moment is enjoying its strongest growth in years.
The IMF forecasts 3.9 percent growth this year and next, the fastest since 2011, thanks to increasing investment and solids job growth. And most of the world is sharing in the prosperity.
President Donald Trump won the White House in 2016 with a campaign that repeatedly targeted nations such as China and Mexico, accusing them of unfair trade practices that have cost millions of American jobs.
Mnuchin has said that the administration’s imposition of tariffs is part of a strategy to level the playing field on trade and reduce America’s huge trade deficits with China and other nations.
“Our objective with China is to have free and fair and reciprocal trade,” Mnuchin said Thursday.