Spring Meetings

The New Washington Consensus

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Two peas in a pod. IMF chief Christine Lagarde and US Treasury Secretary Steven Mnuchin shared a podium at this weekend's IMF spring meetings in Washington. Picture source: Reuters.

The Trump administration and the International Monetary Fund, or IMF, have had their fair share of disagreements on trade policy, to put it mildly.

Sparks flew recently when US Commerce Secretary Wilbur Ross dismissed IMF chief Christine Lagarde’s warnings about protectionism as “rubbish.” Yet despite the harsh rhetoric, the IMF and the Trump administration are actually finding common cause when it comes to trade imbalances.

US Treasury Secretary Steven Mnuchin has sought to tone down the White House’s protectionist rhetoric and talk about “reciprocal trade” instead. This could provide cover for the IMF to close ranks with Washington and exert pressure on countries with large trade surpluses – above all Germany, the world’s export champion.

The White House certainly is not backing down. The IMF member states had to drop a normally boilerplate pledge to oppose protectionism in a statement issued after their spring meetings in Washington this weekend.

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