US treasury secretary Steven Mnuchin moves to ease trade fears

US treasury secretary Steven Mnuchin has insisted that President Donald Trump’s “America First” policy does not mean Washington is seeking to start “trade wars” with Europe.

Ahead of a G20 finance minister meeting in Germany, “friendly and constructive” talks with his Berlin counterpart, Wolfgang Schäuble, marked Mr Mnuchin’s first outing since taking office. Despite Mr Trump’s robust rhetoric against free trade and trading partners, the new US treasury secretary insisted he was more interested in solutions that avoided confrontation.

“Our focus is creating economic growth that is good for the United States and for the rest of the world,” said Mr Mnuchin. “It is not our desire to get into trade wars, it is our desire to deal with where there is imbalance in certain trade relations.”

In Berlin, that was seen as a dig against the way Germany exports €253 billion more in goods and services annually than it imports.

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Dr Schäuble, like all senior Berlin officials, views criticism of Germany’s trade balance – from EU member states, Brussels and international institutions – as sour grapes. The German minister said he had a found a “good basis” to work together with his new US colleague. He welcomed Mr Mnuchin’s language as a “very good message”, but conceded that not all differences would be addressed at the G20 meeting that ends on Saturday.

International concerns

In the resort town of Baden-Baden, Mr Mnuchin will be working hard to ease international concerns about Mr Trump’s proposals to level unilateral currency sanctions and rewrite – or even scrap – international trade deals. Ahead of the meeting, Germany, which holds the G20 presidency, and the International Monetary Fund (IMF) have warned that US protectionist talk risks derailing the global economy.

In response to Mr Trump’s threats to impose import penalties on foreign-produced cars, a move that would hit Germany’s influential motoring industry, Dr Schäuble said that “protectionism is not the answer”.

Mr Mnuchin dismissed concerns that Washington would be the instigator of any disruption, saying President Trump was interested in “free and fair” trade, with agreements that are “reciprocal”.

But he said he would press fellow finance ministers from China, Japan, Germany and other G20 countries to abide by existing currency vows and to not to use their exchange rates for competitive gain and others’ disadvantage.

The Trump administration has regularly targeted China’s yuan policy, accusing the country of keeping its exchange rate artificially low and driving a $350 billion (€326 billion) annual surplus with the US.