Contentious G20 shows US needs time to ‘adapt’, says IMF chief Christine Lagarde

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Baden | Published: March 19, 2017 3:58:50 AM

"Whenever there's a new member at a G20 meeting, there is a process of learning and adaptation," Lagarde told AFP after a finance ministers' gathering in Baden Baden, western Germany.

IMF chief Christine Lagarde. (Reuters)

IMF chief Christine Lagarde sought to play down fears over the US weakening international commitments to free trade and climate change today, saying the new White House needed time to “adapt and learn”. “Whenever there’s a new member at a G20 meeting, there is a process of learning and adaptation,” Lagarde told AFP after a finance ministers’ gathering in Baden Baden, western Germany.

After a two-day meeting, ministers from the group of developed and emerging nations released a communique that dropped past years’ language rejecting protectionism, supporting multilateral trade talks, and committing nations to support the 2015 Paris climate accords. “There’s a new administration in Washington which will find its feet, and which for the moment is obviously taking care not to commit itself too strongly to anything,” Lagarde said.

US Treasury Secretary Steven Mnuchin dismissed previous agreements as “not relevant” in remarks to journalists after today’s talks. Carried to power on the back of a political storm over deindustrialisation in vast areas of the US, President Donald Trump vowed in his inauguration speech to “follow two simple rules: buy American and hire American”.

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His strategy includes threats to penalise companies that manufacture abroad by heavily taxing their products.

But Lagarde insisted that she has “high hopes, especially regarding trade,” after the G20 pointed to growing confidence about a global economic recovery and promised to refrain from manipulating currencies. Trump has attacked major exporters China and Germany over their currencies, saying they are too weak against the dollar — making their products cheaper compared with competing American goods.

In the event, there was little debate on the divisive topic around the G20 tables, various sources said. In its own statement, the IMF said it would ensure “vigorous exchange rate surveillance” to help hold countries to their promises.

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