March 17 (UPI) — In a meeting with his German counterpart, U.S. Treasury Secretary Steven Mnuchin sought to allay fears among European allies, promising the Trump administration is not looking to start “trade wars.”
Mnuchin is in Berlin for the first meeting of the G20 finance ministers since Trump was sworn in on Jan. 20. Before the full meeting, which is set to begin today, Mnuchin and German Finance Minister Wolfgang Schauble held bilateral talks and addressed the media afterward.
Chief among the topics was free trade, after Trump railed against many of the deals the United States has signed, decrying them as domestic job-killers that disproportionately benefit trading partners at the expense of U.S. workers.
Trump largely left Europe out of his campaign rhetoric, focusing instead on Mexico, China and other Asian nations. But Germany has a significant trade imbalance with the United States, exporting far more German goods than it imports from the United States.
Mnuchin said the focus of the Trump administration won’t be picking fights, but working to even out trade imbalances where they exist.
“Our focus is creating economic growth that is good for the United States and for the rest of the world,” Mnuchin said. “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.”
During the campaign, Trump said he would consider any number of economic tactics to address trade deficits, including tariffs, currency sanctions and vowing to rewrite or cancel entire trade deals, though he has yet to follow through on any of those threats in the opening weeks of his presidency.
The German government, led by Chancellor Angela Merkel — who is scheduled to visit the White House today — was critical of Trump’s trade rhetoric during the campaign.
In a sign of cooler heads, Schauble called Mnuchin’s comments a “very good message” and said he is looking forward to a productive summit with other G20 finance ministers.
Despite the more accepting rhetoric, the G20 has yet to agree on a demand by the United States to adopt language calling for a commitment to “free and fair trade.”
Another top priority for Mnuchin at the summit will be addressing currency valuations among the world’s 20 top economies. Trump has assailed China and the European Union for enacting policies that intentionally devalue their currencies, which creates a more favorable environment for exports – if a country’s currency is worth less, the goods produced there are less expensive, and thus exports increase, exacerbating the trade imbalance.
European leaders have denied they are intentionally devaluing the euro, charging that U.S. monetary policy by the Federal Reserve has led to an overvalued dollar. The Fed has raised its benchmark interest rates three times in the last year, signaling strength in the U.S. economy, and improving the dollar’s trading value against foreign currencies.