June 29, 2018 / 12:40 PM / 5 months ago

U.S. Treasury chief Mnuchin slams report that Trump wants to exit WTO

WASHINGTON (Reuters) - U.S. Treasury Secretary Steve Mnuchin said on Friday a report by the Axios news website, that cited sources as saying President Donald Trump wanted the United States to withdraw from the World Trade Organization, was wrong.

FILE PHOTO: U.S. Treasury Secretary Steve Mnuchin speaks during a TV interview at the White House in Washington, U.S., May 21, 2018. REUTERS/Kevin Lamarque/Files

“There’s no breaking news here ... it’s not right,” Mnuchin told Fox Business Network, calling the report “fake news.”

Axios reported earlier on Friday, citing people who were involved in discussions with the president, that Trump frequently told advisers he wanted the United States to quit the WTO, a move with potentially disastrous implications for global commerce.

“This is an exaggeration,” Mnuchin said. “The president has been clear, with us and with others, he has concerns about the WTO, he thinks there’s aspects of it that are not fair, he thinks that China and others have used it to their own advantage, but we are focused on free trade. That’s what we’re focused on - breaking down barriers.”

U.S. stocks wobbled briefly in premarket trading after the Axios report, but regained their footing following Mnuchin’s comments.

One person who has discussed the subject with Trump, according to Axios, said the president frequently told advisers: “I don’t know why we’re in it. The WTO is designed by the rest of the world to screw the United States.”

The 164-member WTO is the only international organization that deals with the rules of trade between countries and states its key purpose as opening trade “for the benefit of all.”

A U.S. withdrawal from it would require an act of the U.S. Congress, and Trump was unlikely to persuade lawmakers to carry out his wish, the Axios report said.

“Sources with knowledge of the situation say the Trump administration will continue to call attention to various ways in which the U.S. encounters what some Trump advisers perceive is unfair and unbalanced treatment within framework of the WTO,” the report said.

The White House did not immediately respond to a request for comment.

Last Friday, the United States told the Geneva-based WTO that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.

The statement by U.S. Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, widely seen as a major bulwark against protectionism.

It came as Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish U.S. trading partners.

Mnuchin was asked earlier on Friday if new trade tariffs the United States has imposed or threatened might wipe out gains from major tax cuts passed into law six months ago.

“I can assure you that we are not going to do anything that wipes out all those benefits or does anything that has a significant risk on growth,” he told Fox Business Network.

Reporting by Tom Miles in Geneva; Additional reporting by Eric Walsh and Doina Chiacu in Washington; Editing by Bernadette Baum

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