US, global financial leaders skirt trade frictions, tout collaboration

Mexico’s Finance Minister Agustin Carstens, IMF Managing Director Christine Lagarde, Germany’s Finance Minister Wolfgang Schauble and US Treasury Secretary Steven Mnuchin take their seats for a group photo on April 22, 2017.

Global economic leaders on Friday continued downplaying possible friction with the Trump administration over currencies, trade and other potentially contentious issues, even while acknowledging that much about the US president’s plans remains unclear.

On a day when Donald Trump himself seemed focused on domestic matters – promising a new US tax plan next week and announcing reviews of financial regulations – world officials gathered just blocks from the White House said there was “broad consensus” with the new president’s advisers over the need to keep economic borders open and coordinate on global financial regulation.

“Almost everybody underscored the importance of open markets and free market access,” German central bank governor Jens Weidmann said following meetings among finance ministers from the world’s top 20 economic powers, including US Treasury Secretary Steven Mnuchin. “That was the consensus.”

His remarks come as finance and economic officials attending meetings of the International Monetary Fund and World Bank took heart in an improving world economy, but also spoke of the sudden raft of political issues that could put that progress at risk.

Trump’s tough talk on trade and seeming suspicion of “globalist” groups like the IMF cast a shadow over the start of this week’s session. Similarly, the French elections on Sunday have been frequently cited as the sort of event that could reverse the euro zone’s tentative economic progress.

Working relationship

The Trump risk, at least for now, seems to have diminished.

Germany currently chairs the Group of 20, an organization that under the administration of President Barack Obama had become a central forum for working out economic issues among the world’s largest economies.

Officials here this week have said Mnuchin and other administration officials seemed ready to continue work on issues like financial regulation, while avoiding overt clashes on issues like the value of China’s currency or Germany’s large trade surplus with the United States.

The Trump administration had previously threatened to impose measures to restrict imports, and verbally attacked Germany for running a large surplus by exploiting a weak euro.

German Finance Minister Wolfgang Schaeuble said earlier on Friday neither topic was discussed in Washington and that he had seen a relaxation in the dispute with the United States over trade.

Steel, of which Germany is a large producer, has become a point of contention.

Speaking at a separate G20 event in Germany, the country’s economy minister, Brigitte Zypries, said a Trump-announced US probe into whether imports of foreign-made steel were hurting national security pointed toward “unwelcome protectionist tendencies.” She said she would discuss the global steel market with US Commerce Secretary Wilbur Ross by telephone next week.

But Schaeuble overall said he believed a “non-confrontational solution” to economic issues would be reached when financial leaders of the world’s 20 top economies meet again in Hamburg in July.

British Chancellor Philip Hammond said he thought the US and UK could go further, and strike a bilateral trade deal, while Japanese and other officials said they did not expect any sharp or disruptive moves from Trump.

Officials also said Trump’s intention to roll back some of the financial rules put into place since the 2008 financial crisis won’t damage the world financial system. Trump’s talk of deregulation has unnerved European regulators, but Weidmann said he was confident there would be no “regulatory race to the bottom.”


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