Mnuchin urges China, EU to respect free trade

Lester Mason
July 23, 2018

U.S. President Donald Trump fully supports the independence of the Federal Reserve and isn't trying to interfere in the foreign-exchange market, Treasury Secretary Steven Mnuchin told reporters in Buenos Aires.

"We very much support the idea that trade is important to the global economy, but it's got to be on fair and reciprocal terms", Mnuchin told a news conference.

"Although the objective is to cut the trade deficit, the desire to do that is for them to open up their markets so that we can compete fairly, and we can grow exports", he said.

France's finance and economy minister Bruno Le Maire hit back, urging the "see sense".

"Global trade can not be based on survival of the fittest", Mr Le Maire said.

Mr Trump, who frequently criticises Europe's 10 per cent vehicle tariffs, is also studying adding a 25 per cent levy on automotive imports, which would hit both Europe and Japan hard.

"In the worst case scenario under current measures" the impact on the global economy "is in the range of 0.5 percent" of gross domestic product on a global basis, Lagarde said.

Small protests against the International Monetary Fund were staged in central Buenos Aires both on the eve of the summit and on Saturday, with locals angered by a 35 percent plunge in the peso between April and June.

Growth in the country would "stabilize in the last quarter of 2018" with a "gradual recovery in 2019 and 2020", she added.

Trump has broken with precedent in recent days with comments criticizing the USA dollar's strength and the Fed's monetary policy, tweeting on Friday that the Fed's rate hikes take away the U.S.

As for the EU, Mnuchin said it would have to make considerable concessions in order for there to be a free-trade agreement between the two.

Sanctions were another issue on the agenda, with Mnuchin insisting North Korea would not benefit from "relief until real progress is made" on denuclearization.

He acknowledged that the United States and European Union "don't see eye to eye on every single aspect" of the Iran nuclear deal but insisted there's a "consistent view that Iran should never have nuclear weapons" and that they should be prevented from exporting "terrorism" to the Middle East.

He said the repression in crisis hit Venezuela by the government of President Nicolas Maduro was "unacceptable" and that USA sanctions targeting those in power were to "encourage better behavior".

Other reports by Iphone Fresh

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