US Treasury chief: trade partners like Trump policies

Lawrence Kim
May 14, 2017

The meeting in the southern Italian seaside town of Bari is to kick off Friday with a discussion of how to make economic growth benefit more people.

"We tried to convince everyone we organised it to show how important the Italian agenda is", he quipped at the end of two days of discussions in a Norman fortress on Italy's southern Adriatic coast.

The talks, scheduled before Friday's events, focused particularly on the potential threat to the global financial system in the event of hackers being able to infiltrate the computer systems that run the global banking system, capital and equity markets.

In concrete terms, the ministers mandated experts to continue their work on assessing the nature of the threat.

But he said the continued uncertainty about the direction of United States policy represented a risk, echoing comments made on Friday by Japanese Finance Minister Taro Aso.

European G7 officials complain that no-one knows what the USA means by "fair trade" and that the only way to establish fairness was by sticking to the rules of the World Trade Organisation - a multilateral framework.

"Of course there are differences and divergences. but we are working well together on common areas of concern and joint measures".

Steven Mnuchin's third encounter with the worldwide community, at a meeting of finance chiefs in Italy, deepened ties even as his government's "America First" policy continues to challenge the global economic consensus.

"People are much more comfortable today now that they've had the opportunity to spend time with me and listen to the president and listen to the economic message on what the economic agenda is, and that's about creating growth in the United States", he told reporters after the meeting.

Aso told Mnuchin that it is necessary to recognize the situation is a crisis.

Already, Trump has yanked the United States out of the 12-nation Trans Pacific trade agreement and threatened to pull out of its NAFTA agreement with Canada and Mexico.

Indeed, whilst the U.S. seeks to lower business and individual income taxes, thus easing the fiscal pressure on the economy, whilst normalising the monetary policies by raising central bank interest rates, the rest of the world's largest economies are not ready to abandon monetary stimuli and relax their fiscal policies.

"It is an encouraging sign", Padoan said.

"We don't want to be protectionist but we reserve the right to be". Considering the lacklustre global recovery in the free trade era of 2010-2016, the USA representatives are even more convinced that domestic growth comes first.

Bank of France Governor Francois Villeroy de Galhau said there was a "light breeze" of optimism within the G7 about the recovering global economy after years of sluggish growth following the financial crisis that began almost a decade ago.

Morneau and Mnuchin met on the sidelines of the Group of Seven finance ministers' meeting in Bari, Italy.

But a green light for the 86-billion-euro package, the third worldwide rescue of the Greek economy since 2010, is now expected to be issued on May 22, potentially bringing an end to the painful cycle of austerity Greece has endured for a decade.

Other reports by Click Lancashire

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