WASHINGTON (AP) — World financial leaders face a major uncertainty as they gather in Washington next week: Who will win the U.S. presidential election and shape policies in the world’s largest economy?
Former Republican President Donald Trump and Democratic Vice President Kamala Harris have said little about their plans for the vote. International Monetary Fund and the World Bank. But their divergent points of view Issues related to trade, tariffs and other economic issues will be top of mind for financial executives when they attend annual meetings of financial institutions.
IMF Managing Director Kristalina Georgieva alluded to the challenges in a speech at the opening of the meetings on Thursday.
Without naming Assetshe warned that “major actors, driven by national security concerns, are increasingly resorting to industrial policy and protectionism, creating one trade restriction after another.”
She said trade “will no longer be the same engine of growth as before,” warning that trade restrictions are “like pouring cold water on an already lukewarm global economy.”
Trump promises, as president, to impose a 60% tariff on all Chinese products and a “universal” tariff of 10 or 20 percent on everything entering the United States, emphasizing that the cost of taxing imported goods is absorbed by the foreign countries that produce those goods.
However, say traditional economists they effectively amount to a tax on American consumers that would make the economy less efficient and drive up inflation in the United States.
Trump has also embraced isolationism and sharply criticized multilateral institutions. During his first term, he signed an executive order to withdraw from the Trans-Pacific Partnership trade agreement and replace the North American Free Trade Agreement with the United States-Mexico-Canada Agreement. His administration blocked new appointments to the World Trade Organization’s appellate body as the terms of its judges expired, leaving the organization without a functioning appellate body.
World Bank President Ajay Bangawho also gave a speech Thursday ahead of the meetings, spoke directly about the election during a question-and-answer session with reporters. He credited Trump for increasing his investments in the International Bank for Reconstruction and Development during his presidency, which provides loans to middle-income developing countries.
“The question will then be how different the nuances of each administration will be,” Banga said. “I don’t know yet, so I’m not going to speculate on how to handle them.”
Harris did not elaborate on her views on the World Bank or the IMF, although while she has adopted some tariffs, she is more likely to continue the Biden administration’s approach favoring international cooperation instead than threats. The Biden-Harris administration did not eliminate tariffs imposed on China during this period. the Trump administration and also in May imposed significant customs tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment.
Harris met Banga in June 2023 when he began his five-year term as president of the World Bank and then issued a statement in which he “welcomed the steps taken to evolve the World Bank, including by expanding its mission to include strengthening resilience in the face of global challenges such as climate change, pandemics, fragility and conflict. »
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Georgieva, who did not speak directly about the elections in her speech, said: “We live in a distrustful and fragmented world where national security has become the top concern of many countries. This has happened before – but never in an era of such high economic co-dependence. My argument is that we must not allow this reality to become an excuse for doing nothing to prevent a further fracturing of the global economy. »
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