By Ovunc Kutlu
The IMF will cooperate with the U.S., despite President President Donald Trump's proposed protectionist policies to promote global trade, Managing Director Christine Lagarde said Thursday.
"From the various contacts that I've had with the administration so far, I have every reason to believe that we will make progress," Lagarde said in opening remarks at the IMF-World Bank Spring Meetings in Washington, D.C.
Trump promised to impose a 45 percent tariff on imports from China and a 35 percent tax on imports from Mexico. Neither promises have been realized but the mere suggestion has caused jitters around global trade.
"We are concerned about trade because it has been a main engine for growth, and it's actually been one of the pillars of prosperity and growth going forward," Lagarde said.
Global trade requires "a level playing field," but it should not have any "distortive measures" or "protectionist measures going forward”, she said.
Trump has long promised to also label China a "currency manipulator" but he backed off that stance last week after meeting with Chinese President Xi Jinping.
Although Trump has made an about face on that promise which would endanger trade between the worlds two biggest economies, there is still a possibility he would choose to prioritize American jobs above the country’s trade agreements -- a move that would hamper global trade in years to come.
"I think a lot of people blame trade for the loss of jobs ... but if you ask the World Trade Organization, they will say at the very most only 20 percent of job loss is from trade," World Bank Group President Jim Yong Kim said.
Global trade helps reduce income inequality around the world, he said.
"We believe that globalization and free trade has had just an absolutely huge impact on poor people and poor countries. I think what you see is a reduction in inequality between countries,” he added.