- U.S.-China trade tensions certain to dominate IMF, World Bank annual meetings
- Finance ministers, central bankers from more than 190 countries coming to Washington
- G7 to discuss sanctions on Russia, Ukraine aid options
Washington, D.C
Trump’s reignited trade war with China clouds IMF, World Bank meetings
WASHINGTON, Oct 13 (Reuters) – Finance chiefs gathering in Washington this week were ready to discuss the global economy’s surprising resilience in the face of Donald Trump’s tariff assaults – until the U.S.-China trade war erupted again with the U.S. president threatening 100% duties on Chinese imports and sending markets into a tailspin.
The annual meetings of the International Monetary Fund and World Bank are now certain to be dominated by questions over whether Trump’s vow to retaliate against China’s dramatically expanded export controls on rare earths will plunge the world’s two largest economies back into a full-blown trade war.
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A delicate truce crafted by Washington and Beijing over the past five months brought tariffs down from triple-digit levels and prompted upgrades to the IMF’s global growth outlook. Plans for Trump to meet with Chinese President Xi Jinping later this month fueled hopes for a further thaw.
But that optimism was shattered on Friday as Trump threatened to cancel the meeting and impose a “massive increase” in tariffs on Chinese goods, along with other countermeasures.
Souring the mood further was China’s move on Friday to match new U.S. port fees for Chinese-built or owned vessels with its own levies on port calls by ships built or flagged in the U.S. or owned by companies more than 25% owned by U.S.-domiciled investment funds.
The IMF and World Bank meetings will bring more than 10,000 people to Washington, including finance ministers and central bank governors from more than 190 countries.
Martin Muehleisen, a former IMF strategy chief who is now with the Atlantic Council, said Trump’s threats may be posturing for negotiating leverage, but said they will inject volatility into the week’s proceedings.
“Let’s hope that sanity prevails. If Trump goes back to 100% tariffs on Chinese goods, there’s going to be a lot of pain in the markets for him,” Muehleisen said.
Trump’s threat on Friday triggered the biggest U.S. stock sell-off in months at a time when investors and top policymakers were already growing anxious about a frothy stock market fueled by an investment boom in artificial intelligence that some officials fear could hurt future employment.
While China has some leverage over Trump due to its global dominance in rare earths, which are essential for tech manufacturing, Muehleisen said it is not in Beijing’s interest to plunge back into an environment of triple-digit tariffs.
It is unclear whether U.S. Treasury Secretary Scott Bessent, who has led U.S.-China trade talks, would meet with any Chinese officials this week in Washington. A Treasury spokesperson declined to comment on Bessent’s bilateral meetings schedule.
GROWTH FORECASTS HOLD UP
Prior to the escalation on Friday’s, IMF Managing Director Kristalina Georgieva had touted the global economy’s ability to withstand multiple shocks, from tariff costs and uncertainty to a slowing U.S. job market, rising debt levels and rapid shifts brought on by AI’s rapid adoption.
In a preview of the IMF’s World Economic Outlook forecasts due on Tuesday, Georgieva said last week that the global GDP growth rate for 2025 would be only slightly less than the 3.3% for 2024. Based on tariff rates that were lower than initially feared – including the U.S.-China duties – the IMF in July raised its 2025 GDP growth forecast by two-tenths of a percentage point to 3.0%.
“What we are seeing is demonstrable resilience in the world,” Georgieva told Reuters in an interview. “But we are also saying it is a time of exceptional uncertainty, and downside risks are still dominating the forecast. So watch it, don’t get too comfortable.”
G7 FOCUS ON RUSSIA
Finance ministers from the Group of Seven industrial democracies are expected to meet on Wednesday to discuss efforts to step up sanctions pressure on Russia that is aimed at ending Moscow’s war against Ukraine.
A British government source said that finance minister Rachel Reeves wanted to ensure joint action with G7 and European Union countries to cut Russia’s energy revenues and access to overseas assets that comply with international law.
Among these options that G7 ministers will discuss is a European Union plan to use Russian frozen sovereign assets to back a loan of 140 billion euros ($162 billion) to Ukraine.
BESSENT’S AGENDA FOR INSTITUTIONS
The U.S. footprint at the meetings will be large, extending from tariff discussions to Bessent’s calls for the IMF and World Bank to pull back from climate and gender issues to focus on their core missions of financial stability and development.
The meetings will be the public debut for Dan Katz, the IMF’s new No. 2 official. Member countries will be watching to see how Katz, a former investment banker who was Bessent’s chief of staff, carries out the U.S. Treasury chief’s agenda, which also calls for stronger IMF criticism of China’s state-led economic policies.
The U.S. Treasury’s market intervention on behalf of Argentina, the IMF’s largest borrower, also will take center stage at the meetings as Argentina’s right-wing libertarian President Javier Milei will join his ally Trump two blocks away at the White House on Tuesday. The move was welcomed by Georgieva to keep Argentina’s market-based reforms on track.
But Muehleisen, the former IMF official, said the Fund risks being pushed by its largest shareholder to enforce Trump’s geopolitical goals – ratcheting up pressure on China and potentially extending more aid to U.S. allies like Argentina without adequate reforms.
“Is it really still a global, multilateral organization, or is it becoming a bit more of an appendage of the U.S. Treasury?” he said. “This will be an interesting debate.”
Reporting by David Lawder; Additional reporting by Andrea Shalal and David Milliken; Editing by Dan Burns and Paul Simao
Our Standards: The Thomson Reuters Trust Principles.
TALLAHASSEE, Fla. (WCTV) – Seventy-two veterans took a trip Saturday to our nation’s capital to visit memorials honoring their service in the armed forces.
This year marks the 12th trip to Washington, D.C. for Honor Flight Tallahassee.
Early Saturday morning, veterans and their guardians met to take a charter flight up to D.C.
Throughout the day, veterans were taken to the World War II memorial, as well as the Korean and Vietnam War memorials. The veterans also visited Arlington National Cemetery and the Tomb of the Unknown Soldier.
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The day ended with a wonderful welcome home celebration.
Our Jacob Murphey, Julia Miller, Taylor Viles, and Grace Temple accompanied the veterans, capturing moments from throughout the day.
The team will have live coverage from Washington, D.C. on Monday to share more from the day’s events.
We will continue to have coverage throughout the month of May, leading up to our Honor Flight special on Memorial Day.
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4 things to know about the weather:
- Chances of rain in the morning
- Gusty Sunday
- Chilly Monday
- Temps will rise again through the work week
Download the NBC Washington app on iOS and Android to check the weather radar on the go.
After a nice and warm Saturday, changes arrive for part two of the weekend.
The first half of your Sunday will have a chance for showers. Winds will pick up with our next system and are expected to gust to about 20-30 mph. Cooler air will settle in, and lows Sunday night fall into the 40s.
Highs temps Monday will reach only into the mid to upper 50s.
However, temperatures will rise through the week, so you won’t need your jackets every day.
QuickCast
SUNDAY:
Showers, then partly cloudy
Wind: NW 10-15 mph
Gusts @ 30 mph
HIGH: Lower 60s
MONDAY:
Partly cloudy
Wind: NW 10-15 mph
Gusts @ 25 mph
HIGH: Upper 50s
Stay with Storm Team4 for the latest forecast. Download the NBC Washington app on iOS and Android to get severe weather alerts on your phone.
Washington, D.C
‘It’s a twilight zone’: Iran war casts deep shadows over IMF gathering in Washington
The most severe energy shock since the 1970s, the risk of a global recession and households everywhere stomaching a renewed surge in the cost of living – hitting the most vulnerable hardest.
In a sweltering hot Washington DC this week, the message at the International Monetary Fund meetings was chilling: things had been looking up for living standards around the world. But then came the Iran war.
“Some countries are in panic,” said the fund’s managing director, Kristalina Georgieva, addressing the finance ministers and central bank bosses in town for the IMF and World Bank spring meetings. “The sooner it [the Iran war] ends, the better for everybody.”
Such gatherings are not typically used to fight geopolitical battles. “You don’t get people shouting at one another at these things,” one senior figure remarked. But, as a record-breaking April heatwave swept the US capital, no one could ignore the mounting damage from the Iran war.
Those familiar with the mood over breakfast at a meeting of the G20’s representatives on Thursday, which included Donald Trump’s treasury secretary, Scott Bessent, and the outgoing US Federal Reserve chair, Jerome Powell – said the atmosphere in the room was sombre amid an open exchange of serious views.
“It is such a twilight-zone meeting,” said Mohamed El-Erian, a former IMF deputy managing director who is now chief economic adviser at the Allianz insurance group. “There are several shadows hanging over it: one is the shadow that comes from concern about the global economy as a whole.
“The second is that some countries are going to be particularly hard hit, and it’s mostly countries that very few people are talking about. But the third concern is the adding of insult to injury: the fact that the US, which started a war of choice, is going to be hit, but by a lot less than elsewhere in relative terms.”
Before Thursday’s breakfast, Rachel Reeves had started her day with an early-morning jog. Joined by her counterparts from Spain, Australia and New Zealand for a run down the iconic National Mall, she posted an Instagram selfie with a not-so-subtle dig: “Friends that run together – work together.”
A day earlier, the chancellor had told a CNBC conference that she thought “friends are allowed to disagree on things” as she criticised Trump’s Iran war as a “mistake” and a “folly” that had not made the world safer.
Speaking at a venue just steps away from the White House, before a one-on-one meeting with Bessent, she said this “fair message” was needed because UK families and businesses were feeling the pain from higher energy prices triggered by the conflict.
Those close to Reeves insist her meeting remained cordial. Britain and the US have significant shared interests in AI, financial services and trade. The chancellor also said the UK government had little time for the Iranian regime.
But with the IMF having warned on Tuesday that the Iran war could risk a global recession – in which Britain would be the biggest G7 casualty – it was clear Reeves had travelled to Washington ready to pick a fight.
“I’m struck by how vocal she has been and the words she used,” said one global financier. “We know the disagreement between Bessent and [European Central Bank president] Christine Lagarde earlier in the year. But that was in private.”
At a cocktail party held at the British ambassador’s residence for hundreds of diplomats and financiers – including the Bank of England’s governor, Andrew Bailey, the chief executive of Barclays, CS Venkatakrishnan, and dozens of senior figures – this transatlantic tension, weeks before King Charles’s US state visit, was a major topic of conversation.
The other, in the balmy residence gardens, was one of its former occupants, Peter Mandelson, as revelations about the former ambassador’s appointment threatened to further rock the UK government.
Before the war, the agenda for the IMF had been about global cooperation; the adoption of AI, jobs and work to eradicate poverty. Each of those tasks had now been complicated, but not least the task of countries working together.
For many at the meetings, the focus was on forging closer global cooperation without the world’s pre-eminent superpower.
“Everybody is talking about how you hedge against American decisions,” said David Miliband, the former UK foreign secretary, who now runs the International Rescue Committee. “You can’t do without them, because they’re 25% of the global economy. But, in a lot of fora, they’ve pulled out.
“So everyone has to think, how does one structure international cooperation? The old west is not coming back. And so everyone has to figure out how to position themselves for that world.”
For those gathering in Washington, there was irony in the fact that they were meeting in the halls of institutions founded, under US leadership, to promote global cooperation after the second world war. The whole idea of the Bretton Woods institutions was to avoid the dire economic conditions and warfare of the 1930s and 1940s. Yet this year’s meeting was taking place amid these intertwining problems.
In their conversations about the best economic policy response to the shock of conflict, the economists also knew the real power to make a difference lay two blocks across town from the IMF and the World Bank – behind the security cordons and construction equipment blocking the White House from public view. “It is not clear they can do anything about it,” said El-Erian.
Still, with a booming economy driven by AI – including Anthropic’s powerful Mythos model, the topic of much conversation – most countries cannot afford to completely break off US ties.
“People want to find ways to insulate themselves from the mess. But, on the other hand, they admire the US private sector,” El-Erian said. “The best way I’ve heard it put, is: they want to go long the private sector and short the mess. But it’s almost impossible to do.”
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