WASHINGTON (AP) — The United States is resisting pressure to back off President Donald Trump’s tough America First trade policy at a meeting of global finance leaders worried about the threat of a damaging trade war.
U.S. Treasury Secretary Steven Mnuchin charged that “unfair global trade practices impede stronger U.S. and global growth, acting as a persistent drag on the global economy.” He urged the International Monetary Fund to do more to combat unfair trade practices.
Mnuchin issued the comments Friday during the spring meetings of the 189-country IMF and its sister lending agency, the World Bank. The three days of meetings wrap up Saturday.
Other countries have used the gathering to protest Trump’s protectionist trade policies, which mark a reversal of seven decades of U.S. support for ever-freer global commerce. “We strongly reject moves towards protectionism and away from the rules-based international trade order,” said Már Guðmundsson, governor of the Central Bank of Iceland. “Unilateral trade restrictions will only inflict harm on the global economy.”
The countries struggled to find common ground with Washington over trade. But they agreed on the importance of coordinating other economic policies in an effort to sustain the strongest global economic expansion since the 2008 financial crisis.
“We have to keep this group working together,” said Nicolas Dujovne, the Treasury minister of Argentina. In addition to wrangling over trade, finance officials from the Group of 20 powerful economies focused on two other threats to growth — geopolitical risks and rising interest rates.
Dujovne, whose country is chairing the G-20 this year, met with reporters Friday to summarize talks the G-20 finance officials had held as a prelude to the IMF-World Bank meetings. The United States was represented at the G-20 talks by 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.
Trump’s tough turn on trade has dominated the meetings.
The administration has rattled financial markets with a series of provocative moves in recent weeks. Last month, it slapped taxes on imported steel and aluminum. Next it proposed tariffs on $50 billion in Chinese products to sanction Beijing for its aggressive efforts to obtain U.S. technology. China counterpunched by targeting $50 billion in U.S. exports. Trump then ordered his trade representative to target up to $100 billion more in Chinese products.
Instead of sounding conciliatory over trade, Mnuchin 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.”
Meantime, other countries repeatedly sounded warnings about a potential 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, director-general of the World Trade Organization, told the IMF’s policy committee.
French Finance Minister Bruno Le Maire warned 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 “tensions between the US and China have taken a worrying turn.”
Despite the trade disputes, the global economy 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 solid job growth. And most of the world is sharing in the prosperity, making this the broadest economic expansion in a decade.