WASHINGTON | US defends tough trade stance at global finance meeting

Alicia Cross
April 23, 2018

Other countries have used the gathering to protest Trump's protectionist trade policies, which mark a reversal of seven decades of USA support for ever-freer global commerce.

A visit by the US Treasury secretary to China likely signals a breakthrough in the dust-up between the world's 2-biggest economies, whose threats to slap tariffs on each other have rattled markets and raised fears of a trade war. "At the International Monetary Fund, we try to establish dialogue", she said.

On the conclusion of the annual spring meeting of the International Monetary Fund and the World Bank, the IMFC meeting chaired by South African Governor of Reserve Bank Lesetja Kganyago in a communique urged the IMF to work closely with members to strengthen fiscal frameworks and improve debt management capacity, and to work with debtors and creditors on promoting sustainable lending practices and tackling data gaps.

German Finance Minister Olaf Scholz met with US Vice President Mike Pence and Trump economic adviser Larry Kudlow at the White House, and afterwards told reporters that "all sides are really working on finding a good solution".

Ilan Goldfajn, Brazil's central bank chief, said he's anxious that trade disputes could upset financial markets and derail the steady global expansion.

Europe was also hit by the steel and aluminum tariffs but the U.S. suspended the duties on imports from the EU, Canada, Mexico and four other countries, leaving China as the primary target.

The WTO projects global merchandise trade will expand by 4.4 percent this year, after increasing by 4.7 percent in 2017.

Mnuchin said that the broad-based strengthening of the global economy over the past year is a welcome "and long overdue" development.

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Secretary Mnuchin said he is "cautiously optimistic" of reaching an agreement with China that bridges their differences on trade.

The IMF has highlighted the trade tensions as a major downside risk to the otherwise solid global recovery, and Lagarde said the dispute undermines confidence and creates uncertainty that could choke off investment which has been a prime engine of the global recovery. Mnuchin said he discussed Xi's proposals with Chinese officials. Trump then ordered his trade representative to go after up to $100bn more in Chinese products.

The timing is unclear, and he did not provide details on the topics to be discussed but said "a trip is under consideration".

US Treasury Secretary Steven Mnuchin today said rising debt levels in low-income countries threaten to generate significant economic and social instability and imperil hard-won developmental gains.

Mnuchin said he met with Yi Gang, governor of the People's Bank of China, at the International Monetary Fund gathering this week.

"I did meet with the Chinese here. China welcomes this", a short statement on the commerce ministry's website said.

Deputy Governor of the Central Bank of Egypt Ramy Abul-Naga said on Sunday that foreign currency inflows to banks operating in Egypt have risen to more than $77 billion since the flotation of the Egyptian currency in November 2016.

"China's rising economic might, coupled with the perception of the U.S.as an unreliable and untrustworthy partner, is driving countries around the world closer into China's economic embrace", said Eswar Prasad, a former chief of the IMF's China division and now a professor at Cornell University. 'The Chinese side has received information that the USA side hopes to come to Beijing to discuss economic and trade issues. The statement, citing an unnamed spokesman, said, "The Chinese side welcomes this".

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