Mnuchin: Trade deals boosting U.S. growth, Boeing 737 MAX a drag

Marco Green
January 22, 2020

According to US Treasury Secretary Steven Mnuchin, the latest trade deals with China and neighboring Mexico and Canada will boost US growth this year.

But Mr Mnuchin was clear the White House remains ardently against the move as he also hinted retaliatory tariffs could be imposed on the UK's vehicle industry if the tax is rolled out.

But speaking during a panel discussion at the World Economic Forum in Davos, the Chancellor said the Government was committed to rolling out its plans in April in a bid to boost United Kingdom tax-take from the global firms.

France, which considered a similar tax, agreed this week to suspend down payments for this year's digital tax after Washington threatened retaliation with tariffs on French wine. "It is important, as we said at the time. when we first legislated for it, that it is a proportionate tax", he added.

He said the tax was "proportionate" and "temporary" and told the annual World Economic Forum in Switzerland: "It will fall away once there is an global solution".

The US Senate voted for a new trade agreement between the US, Canada and Mexico earlier this month.

Appearing alongside Mr Javid on a panel at the Swiss ski resort, Mr Mnuchin said: "I'm sure the president and Boris will be speaking on it as well, as the president did with Macron".

"I think we have been pretty clear that we think the digital tax is discriminatory in nature", he said.

British Chancellor Sajid Javid has committed the United Kingdom to enforcing a digital services tax on global tech companies, despite threats from the USA that they may respond by putting "taxes on their auto companies" - risking a trade war.

OECD chief Angel Gurria has told Britain to "hold fire" on its tax and told the BBC he feared there would be a "cacophony and a mess" with tit-for-tat tariffs.

But Mr Javid said there has been a growing disconnect between where customers of online firms are based and where they are taxed.

Mnuchin said at the World Economic Forum in Davos that he was overly pessimistic about the recent projections by the International Monetary Fund (IMF), which lowered its forecast for US growth to 2.0 percent this year and 1.7 percent in 2021 felt.

But he added: "When we look at the forecast for 2020, business looks very good and there is no question the two trade deals will have an impact".

This came after the Chancellor told the Financial Times in a Westminster Cafe that alignment with European Union rules would not be a priority in renegotiating Britain's trade relations post-Brexit.

Other reports by Click Lancashire

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