Steven Mnuchin arrived at the World Economic Forum in Davos with the uncompromising message that the Trump administration’s America First policies, which include a more protectionist attitude towards trade, were good for the US and the rest of the world.
In a news conference on his arrival at the Swiss mountain resort on Wednesday, the US Treasury secretary broke with tradition, saying that a weaker dollar was good for US trade, although he expected that economic strength would support the currency in the longer term.
His words, ahead of president Donald Trump’s speech at the forum on Friday, marked the arrival of a huge US delegation to Davos with 10 cabinet members present, which is intended to show American strength and what the Treasury secretary called the “success that we’ve had in the first year under President Trump of the economic programme”.
Mr Mnuchin said: “This is about an America First agenda, but America First does mean America working with the rest of the world.”
“What’s good for the US is what’s good for the rest of the world given we are one of the largest trading partners for the world, one of the largest investment opportunities . . . We are open for business,” he added.
On the weakness of the US dollar in recent weeks, the Treasury secretary added: “The dollar is one of the most liquid markets. Where it is in the short term is not a concern for us at all. A weaker dollar is good for us as it relates to trade and opportunities. Longer term, the strength of the dollar is a reflection of the strength of the US economy and that it is, and will continue to be, the primary reserve currency”.
Wilbur Ross, the US commerce secretary who shared the platform with Mr Mnuchin, took a characteristically tough line on the trading policies of other countries including China, the day after the US imposed higher tariffs on washing machines and solar panels.
Mr Ross said: “Trade wars are fought every single day . . . And, unfortunately, every single day there are also various parties violating the rules and trying to take unfair advantage. So trade wars have been in place for quite a little while; the difference is the US troops are now coming to the ramparts.”
The commerce secretary criticised European finance ministers who have complained that aspects of the Trump administration’s corporate tax plans are anti-competitive and violate international rules. “You may have noticed that both the French and German finance ministers were raising the question about whether our new lower tax rates for corporations were actually trade barriers. That’s a funny concept that someone would complain about a tax reduction is somehow impeding trade.”
In conciliatory remarks, Mr Mnuchin said he was working with his European counterparts to resolve disputes over some details in the tax plan, but not the overall tax rates.
He promised there would be more trade actions to come and said decisions were pending in the fields of intellectual property, steel and aluminium, “What has provoked a lot of the trade actions is inappropriate behaviour of our trading counterparts. Many countries are good at the rhetoric of free trade, but in fact actually practise extreme protectionism,” he said.
In a swipe at Justin Trudeau, the Canadian prime minister who at Davos on Tuesday urged a successful renegotiation of Nafta, Mr Mnuchin said the US needed to ensure its opportunities were equal to those of Mexico and Canada. He criticised Mr Trudeau for using the platform at Davos “to put a little pressure on the US in the Nafta talks”.
The tough US stance met with a robust response from China at the World Economic Forum. Liu He, the most trusted economic adviser of President Xi Jinping, reiterated his country’s “firm support” for economic globalisation.
“China has stood firm against all forms of protectionism,” he said as he praised “initiatives to increase imports” and China’s declared willingness to protect intellectual property.