Issues of low growth, high debt, and escalating wars topped the official agenda of the annual meetings of the International Monetary Fund and World Bank last week, but financial officials spent a lot of time examining concerns about the potential effects of Donald Trump’s return to power in the US presidential elections next November, according to Reuters quoted in its report.
The latest opinion polls showed that Republican Party candidate Trump was able to significantly reduce the early lead enjoyed by his rival, Democratic Party candidate Vice President Kamla Harris.
Trump’s progress has been raised in almost every conversation between finance officials, central bankers and civil society organizations, who have attended meetings in Washington for a week now.
Fears
Among the concerns was the possibility of Trump turning the global financial system upside down through massive increases in tariffs, issuing trillions of dollars in debt, and changing the course of action to combat climate change in favor of more energy production from fossil fuels, according to Reuters.
Bank of Japan Governor Kazuo Ueda said, “Everyone seems concerned about the great uncertainty about who will become the next president (of the United States) and the policies that will be taken during his term.”
Trump has pledged to impose 10% tariffs on imports from all countries, and 60% tariffs on imports from China. These tariffs would affect supply chains globally, likely leading to retaliatory measures and increased costs.
In contrast, finance officials consider Harris’ victory a continuation of current President Joe Biden’s return to multilateral cooperation over the past four years in the areas of climate, corporate taxes, debt relief, and development bank reforms. Although Harris’ plans are also likely to lead to an increase in debt, but it will be This is to a much lesser extent compared to Trump’s plans.
Problem solving
When IMF Director General Kristalina Georgieva was asked how the specter of Trump’s return would affect the meetings and the Fund’s policy advice, she said that the discussions focused on resolving the economic problems at hand.
She added in a press conference, “Members feel that the elections are for the American people. What we have to determine are the challenges and how the International Monetary Fund can address them constructively.”
The head of the International Monetary Fund’s Steering Committee, Saudi Finance Minister Mohammed Al-Jadaan, stressed previous cooperation with previous American administrations, whether Republican or Democratic, including the Trump administration, saying, “We just need to make sure that we continue this dialogue,” and others expressed the same position during the meetings.
