Global finance, Trump strike truce
WASHINGTON — When U.S. Treasury Secretary Steven Mnuchin took the stage of the International Monetary Fund’s marbled atrium this weekend, one might have expected a hostile response.
The IMF elite, after all, represent the very “globalists” Donald Trump accuses of pulling America down by peddling trade policies that only benefit them. Instead of booing, however, the standing-room only crowd greeted Mnuchin with loud applause.
The warm reception was one of several signals during the IMF’s spring meeting that following a rocky start to their relationship, both the international financial community and the Trump administration are trying to find common ground on issues from financial regulation to trade ahead of the G20 summit in Hamburg in July.
“I think now we are moving from rhetoric to pragmatism,” European Commissioner for Economic and Financial Affairs Pierre Moscovici told POLITICO after meeting with Mnuchin and other top U.S officials. “We have an administration that is now more in possession of its agenda, even if it’s not yet totally finished business and has, as we do, a willingness for dialogue. But differences remain.”
While Moscovici said he believed Europe and the Trump administration “are in a new phase of our relationship,” he noted, “we are not similar.” Europe’s biggest worry remains the threat of a protectionist salvo on trade. “They still have strong intentions on that,” Moscovici said.
Nonetheless, officials from several countries at the IMF meetings said they still believed there was time to avert an outright confrontation with Washington.
The atmospherics and body language during the meetings suggest a thawing in the relationship is well underway. During a nearly 40-minute on-stage discussion with Mnuchin on Saturday, IMF Managing Director Christine Lagarde took pains to praise and welcome him.
“Let me turn to what I’m accustomed to, what we’re all accustomed to, which is U.S. leadership,” Lagarde said at one point. “How do you see U.S. leadership in the global economy going forward?”
Mnuchin’s magnanimous response to the softball: “If we can grow the U.S. economy, that’s not just good for the U.S. worker, that’s good for international growth as well … That’s what we’re focused on.”
He then returned the favor, declaring the IMF had done “a great job” in fulfilling its mission and that its role remained “critical.”
Following Trump’s often belligerent “America first” rhetoric in recent months, Mnuchin’s platitudes acted like a salve on the international policymakers’ frayed nerves.
On the contentious issue of trade, Mnuchin reiterated the U.S. strategy was to ensure it got as good a deal as its trading partners, insisting the U.S. “is the most open trading market there is.”
“So it’s tit for tat, ‘I’m open, you’re open,’” Lagarde responded.
“We like to use the word ‘reciprocal,’ as opposed to your phrase,” Mnuchin said laughing.
The lighthearted exchange stands in sharp contrast to the more testy exchanges between Washington and its trading partners in recent months.
Mnuchin seemed particularly pleased that IMF members, acceding to U.S. demands, dropped direct references to fighting protectionism from the closing statement by the International Monetary and Financial Committee.
The move followed a clash over the language at last month’s G20 meeting of finance ministers in Germany, where the language was also removed.
“What a difference my first trip versus my second set of meetings,” Mnuchin told Lagarde. “As you recall, we spent an enormous amount of time on the communiqué. This time it seems much simpler.”