U.S. Treasury Secretary Steven Mnuchin said Saturday after meeting with officials from the world’s other industrialized democracies that he thought they were more at ease with Donald Trump’s economic policies.
“People are more comfortable today, now that they’ve had the opportunity to spend time with me and listen to the president and hear our economic message,” Mnuchin said after a two-day meeting in Bari, Italy, with members of the Group of Seven, industrialized nations commonly known as the G-7.
Officials from the G-7 countries hoped to learn more about the U.S. president’s plans, which they feared would revive protectionist policies and result in a global regression on issues such as banking reform and climate change.
After the meeting, officials from Japan and member European countries remained concerned about the economic shift in Washington, particularly after Mnuchin said the U.S. reserved the right to be protectionist if it thought trade was not free or fair.
“All the six others … said explicitly, and some very directly, to the representatives of the U.S. administration that it is absolutely necessary to continue with the same spirit of international cooperation,” said French Finance Minister Michel Sapin.
Don’t ‘backpedal’ on free trade
Bank of France Governor Francois Villeroy de Galhau said continued uncertainty about U.S. policy could dampen optimism within the G-7 about the global economy’s gradual recovery from the financial crisis that began nearly a decade ago.
De Galhau echoed the sentiments of Japanese Finance Minister Taro Aso, who said, “We must not backpedal on free trade, as it has contributed to economic prosperity.”
European officials complained that the U.S. meaning of “fair trade” remained unclear and that the only way to establish fairness was to abide by the multilateral framework developed by the World Trade Organization.
A senior Japanese Finance Ministry official said the most significant question pertained to Trump’s U.S. tax cut proposal that could fuel America’s economic recovery.
Trump has proposed slashing the U.S. corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought back to the U.S.
The G-7 is composed of Britain, Canada, France, Germany, Italy, Japan and the U.S.