International
Monetary Fund (IMF) Managing Director Christine Lagarde gestures
as she arrives at a G-24 meeting during 2013 Spring Meeting of
the International Monetary Fund and World Bank in Washington,
April 18, 2013.
REUTERS/Yuri
Gripas

WASHINGTON — This year’s spring meetings of the International
Monetary Fund are like one big therapy session for the global
financial elites, and everyone is venting about the same issue:
Donald Trump.

After all the IMF is the ultimate “globalist” institution derided
by Trump and his anti-foreign, trade-restricting supporters and
advisers. Trump has already ditched the long-negotiated
TransPacific Partnership (TPP) trade deal with 11 other nations
in the region, is threatening to rip up other accords like the
North-America Free Trade Agreement (NAFTA), and has even hinted
he may try to yank
the United States out of the 164-member World Trade
Organization.

On the sidelines of the meeting, economists and policymakers
wondered what Trump might do next on trade. The Wall Street types
who also flock to the event seem especially freaked out about
whether his stock market-boosting
tax cut promises might be compromised for good after an
embarrassing flop on healthcare. 

Yet here was IMF Managing Director Cristine Lagarde trying to put
a brave face on the whole thing: “I have every reason to believe
that we will make progress, that we will cooperate all together.”

The statement came just days after Trump signed a “Buy American,
Hire American” executive order that pretty much runs directly
against the open trade credo that the IMF and the United States
itself have championed for the last 80 years.

Meanwhile, the Fund itself pushed back against Trumpism in its

April 2017 report on global financial stability. The report
directly warned against Trump’s plans to slash tax rates for
corporations.

“Cash flow from tax reforms may accrue mainly to sectors
that have engaged in substantial financial risk taking,” the IMF
said. “Such risk taking is associated with intermittent large
destabilizing swings in the financial system over the past few
decades.”
 

“Risks of an abrupt tightening in financial conditions and
increased protectionism pose new challenges for policymakers,”
the report added in another direct allusion to Trump.

But again, some top officials tried to downplay the extent of
disagreements.

“Almost everybody underscored the importance of open
markets and free market access,” German
central bank governor Jens Weidmann said following
meetings among finance ministers from the Group of 20 nations,
which central bankers also attend. “That was the
consensus.”

Germany has been one of many direct targets of Trump’s
accusations of unfair trading behavior. His key economic advisor
on trade, Peter Navarro,
has accused Germany of manipulating interest rates and
currency to gain a trade advantage, ignoring the salient
fact that the country’s membership in the eurozone means monetary
policy is set by the European Central Bank not the German
Bundesbank.

Amid the noise, it’s important to recall that the IMF, set up in
the post-war period, was devised and built by the United States
and in large part to help American firms succeed internationally.
The notion that it is somehow standing in the way of US interests
is ludicrous on its face.

“With the world’s economic policy elite converging on
Washington this week, it would be hard to find an institution
that plays a greater role in supporting the economic and
strategic interests of the United States than does the IMF,”
argued Douglas Rediker, a former IMF board member and Heidi
Crebo-Rediker, ex-chief economist at the US State Department

in a recent Foreign Policy article.