Global finance leaders dodge conflict with Trump White House
- Author: Zachary Reyes Apr 24, 2017,
Apr 24, 2017, 11:46
World Bank President, Jim Yong Kim, said the global body was encouraged to see stronger economic prospects after years of disappointing global growth.
German Finance Minister Wolfgang Schaeuble said early Friday "we can only tackle the big challenges of our times" with "stronger global coordination".
U.S. Treasury Secretary Steven Mnuchin repeated a call for the International Monetary Fund to police the currency markets and call out countries that undervalue their currencies to gain an unfair price advantage for their exporters. The fund has argued in its latest economic forecasts that protectionist policies would crimp global growth that is starting to gain traction.
Since taking office, Trump has pulled the United States out of a 12-nation Pacific trade agreement negotiated by the Obama administration and just this week ordered the Commerce Department to speed up an investigation into whether steel imports posed a national security threat.
"From the various contacts that I have had with the administration so far, I have every reason to believe we will make progress", IMF Managing Director Christine Lagarde told reporters.
"The president believes in reciprocal trade deals and reciprocal free trade".
The IMF reported this week that the world economy will expand 3.5 percent this year, up from 3.1 percent in 2016 and a sign that it is escaping a long period of lackluster growth that Lagarde once lamented as "the New Mediocre".
The spring meetings, which will also include discussions Friday among finance ministers and central bank leaders from the Group of 20 major economic powers, were likely to be dominated by talk over the Trump administration's efforts to reduce America's huge trade deficits, which Trump during the presidential campaign blamed for the loss of millions of good-paying factory jobs.
Lagarde repeatedly has stressed that giving in to protectionism will not help those on the margins and in fact will make matters worse by driving up prices and eroding global growth.
But for the moment the Trump administration is focused on aggressive rhetoric, attacking individual countries that have trade surpluses with the United States, including Germany, as well as China and Mexico.
Opening the meetings in Washington, IMF Managing Director Christine Lagarde said that the IMF would press for "a fair and level playing field", adding that this meant "no use of distortive measures, no protectionist measures".
Lagarde also noted on Wednesday that the International Monetary Fund would listen to all of its members, and work for "free and fair" trade.
In the United States, the Federal Reserve has raised short-term interest rates twice since December last year, is on target for more hikes this year and is weighing whether to begin selling part of its vast portfolio of bonds, a move that also could drive up rates. It is unlikely that the bailout review will be wrapped up before May 22, when euro zone finance ministers are set to meet in Brussels to discuss the Greek issue, the spokesman said.