Economy

WASHINGTON (Reuters) – Donald Trump’s former Treasury secretary, Steven Mnuchin, said he will not seek to join the president-elect’s new administration but is ready to offer advice to his successor, including on how to strengthen sanctions on Iran and Russia and contain the growth of U.S. debt.In an interview, Mnuchin told Reuters it was important for the Treasury to work towards strengthening U.S. trade policy. This includes holding Beijing to its U.S. goods purchase commitments in Trump’s January 2020 Phase One deal to rebalance U.S.-China trade, which he said “they’re not living up to.”Serving as Treasury chief during Trump’s first term “was the experience of a lifetime, and I’m happy to advise on the outside,” Mnuchin said on Friday. “I’m sure they’ll have a lot of great choices.”He declined to name any favorites.Reuters reported on Friday that two prominent hedge fund investors, Scott Bessent, founder of Key Square Group, and John Paulson had emerged as the top contenders for Treasury secretary, and that Bessent had met with Trump.Mnuchin founded Liberty Strategic Capital, a private equity firm, after leaving office with investments from Softbank (OTC:SFTBY) Group and Abu Dhabi’s Mubadala sovereign wealth fund.ECONOMIC TEAMMnuchin said it was important that all parts of Trump’s economic team – the Treasury, Commerce Department, U.S. Trade Representative’s office and White House National Economic Council – work closely together as a group, as they did during trade and tariff negotiations with China in 2018 and 2019.Mnuchin, a former Goldman Sachs executive, said financial markets experience was important for the Treasury secretary to have, but so is a strong management background. This is because Treasury spans vast areas of the economy from regulatory and tax policy to international sanctions, with the latter taking considerable time during his tenure, he said.The U.S. needs stronger enforcement of financial sanctions and more actions to cut off oil revenues from Iran and Russia, he said, noting that sanctions on Russia over its war in Ukraine have been “more of a headline” than effective.A G7-imposed price cap of $60 per barrel of Russian crude oil may be reducing Russia’s oil revenues, but “Russia is selling plenty of oil and gas,” he added.These actions need to be combined with an increase in U.S. oil and gas production and stronger output from other Middle East countries to make up for sanctions-reduced supplies from Russia and Iran to keep prices stable, Mnuchin said.MANAGING DEFICITSAsked whether Trump’s plans to extend expiring individual tax cuts next year and end taxes on tips, Social Security and overtime income would run up a worrisome amount of U.S. debt, Mnuchin said that growing deficits needed to be brought under control.He said he believes that Congress and the administration can strike a balance between extending the tax cuts and finding savings in both discretionary and non-discretionary spending. Some revenue will be made up through stronger economic growth and from Trump’s higher tariffs, he added.Mnuchin defended the Trump administration’s heavy COVID-19 relief spending which, along with a revenue collapse during the pandemic, led to a record $3.1 trillion deficit in fiscal 2020, but he said the Biden administration had overspent.The U.S. deficit in fiscal 2024 ended on Sept. 30 topped $1.8 trillion, the highest outside of the COVID era, as public debt interest costs exceeded $1 trillion for the first time. “I think the spending we did in COVID was necessary, or there would have been a worldwide depression, not a recession,” Mnuchin said. “But I think the ongoing spending of the Biden administration clearly created inflation and created big deficits, and that has to be addressed.” More

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Farage, the Brexit-campaigner and self-described troublemaker, is a friend of Trump and was at his election victory party in Florida.He has offered to act as an interlocutor between the British government and the Trump administration, which takes power in January.The Treasury minister Darren Jones said on Sunday that the government would likely reject that offer.”I think that’s probably unlikely,” he told Sky News, saying Farage, who is a member of parliament, should probably spend his time with his constituents rather than in the United States.Governments around the world are trying to figure out how to deal with Trump, who has promised to increase tariffs and whose first four-year term was characterised by a protectionist trade policy and isolationist rhetoric, including threats to withdraw from NATO.Starmer delayed starting a recruitment process for a new ambassador to Washington until the result of the U.S. election was known.The role will be crucial in the coming years in navigating Britain’s relationship with the Trump administration. Farage said at the weekend he has “a great relationship” with Trump and would be willing to act as an intermediary for the government because it is in the national interest. More

After gains by organized labor under President Biden, a second Trump administration is likely to change course on regulation and enforcement.Joseph R. Biden Jr. promised to be the most pro-labor president in history. He embraced unions more overtly than his predecessors in either party, and filled his administration with union supporters.Labor seemed to respond accordingly. Filings for unionization elections spiked to their highest level in a decade, as did union victories. There were breakthroughs at companies like Starbucks and Amazon, and unions prevailed in organizing a major foreign auto plant in the South. A United Automobile Workers walkout yielded substantial contract gains — and images of Mr. Biden joining a picket line.As Donald J. Trump prepares to retake the White House, labor experts expect the legal landscape for labor to turn sharply in another direction.Based on Mr. Trump’s first term and his comments during the campaign — including his praise for Tesla’s chief executive, Elon Musk, for what he said was Mr. Musk’s willingness to fire striking workers — these experts say the new administration is likely to bring fewer challenges to employers who fight unions. “There will be a concerted effort to repeal pro-worker N.L.R.B. precedents,” said Heidi Shierholz, a senior Labor Department official during the Obama administration, referring to the National Labor Relations Board.Experts like Ms. Shierholz, who is now president of the liberal Economic Policy Institute, said they also expected the Trump administration to ease up on enforcing safety rules, to narrow eligibility for overtime pay and to make it harder for gig workers to gain status as employees.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The report outlines that such a tariff could lead to a significant reduction in Chinese exports to the US potentially decreasing China’s GDP growth by approximately 2.4 percentage points in an extreme scenario.However, Citi believes that a universal 60% tariff is more likely a negotiating tactic rather than an imminent policy change.“The proposal of a 60% universal tariff looks more likely to be a bargaining chip than a real risk, in our view,” economists led by Xiangrong Yu said in the note.They anticipate a more realistic scenario where the effective tariff might increase by an additional 15%, which would have a lesser impact on China’s GDP, decreasing it by 0.5 to 1.5 percentage points depending on trade diversion effects.The firm also speculates on China’s possible responses to a high tariff rate. Citi suggests that Chinese policymakers are unlikely to respond to pre-election rhetoric but may allow the Renminbi (RMB) to depreciate to between 7.7 and 8.0 if a 60% tariff is implemented.Initially, the People’s Bank of China (PBoC) might defend the currency to manage market expectations and bilateral trade imbalances. Moreover, Citi expects China to continue its focus on technological advancements rather than resorting to counter-cyclical measures.Regarding the ongoing National People’s Congress Standing Committee (NPCSC) meeting, Citi does not believe it will be heavily influenced by the US election outcome.The meeting’s agenda is primarily focused on China’s fiscal support for 2024 and risk resolution strategies, which are driven by domestic concerns such as the growth target, property market downturn, deflation, and weak consumption.While external uncertainties may prompt additional domestic support, immediate policy reactions to the US election are deemed unlikely by Citi.“The CEWC (Central Economic Work Conference) in mid-December could be a better venue to assess the US election impact,” strategists said.Citi anticipates that the NPCSC will concentrate on risk resolution rather than stimulating demand. The committee has discussed a new round of debt swaps and may provide further details later.Although the Ministry of Finance (MoF) has recycled an unused local government bond (LGB) quota of RMB 400 billion, Citi does not expect a significant revision to the 3%-of-GDP headline deficit target.Looking ahead, the Wall Street firm suggests that it is too early to dismiss the possibility of substantial stimulus for 2025. They maintain a base case for a fiscal deficit of around 3.8% of GDP in 2025, regardless of tariff scenarios.However, should a 60% tariff be enacted, fiscal stimulus “could step up further and focus more on end-demand like consumption and property, in our view,” strategists said.“The RMB10 trillion stimulus that top policy advisors such as Liu Shijin have advocated would become more plausible and likely in the face of more trade headwinds,” they added. More

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