- 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.
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Washington, D.C
How Lawmakers Are Responding to the Shutdown
The government shutdown is now the longest in history. Panelists joined Washington Week With The Atlantic to discuss how voters and lawmakers are responding, and more.
Three weeks before Thanksgiving, “the administration has chosen to not find money to fund the food-assistance program for some 42 million Americans,” Jeff Zeleny, the chief national-affairs correspondent at CNN, said last night. “But they have found money for military payments and ICE officers and others. That choice, he added, “is beginning to catch up with the administration and Republicans.”
Meanwhile, “Democrats seem to be much more dug in than they were before Tuesday,” Atlantic staff writer Mark Leibovich noted. “I think they seem emboldened by Tuesday’s elections.”
Joining the editor in chief of The Atlantic, Jeffrey Goldberg, to discuss this and more: Leigh Ann Caldwell, the chief Washington correspondent at Puck; David Ignatius, a foreign-affairs columnist at The Washington Post; Mark Leibovich, a staff writer at The Atlantic; and Jeff Zeleny, the chief national-affairs correspondent at CNN.
Watch the full episode here.
Washington, D.C
DC Mayor Bowser is not the target of Justice Department investigation, officials say
WASHINGTON — The Justice Department is scrutinizing a trip that Washington, D.C., Mayor Muriel Bowser took to Qatar, but the mayor is not a target of the investigation, a person familiar with the matter told The Associated Press on Friday.
The probe into a trip Bowser took with staff in 2023 is focused on a lobbyist tied to the Democratic mayor, according to the person, who spoke on the condition of anonymity to discuss the investigation.
The New York Times reported Thursday that federal prosecutors in Washington had opened a corruption investigation into Bowser and were looking into potential violations of bribery or campaign finance laws related to the trip.
But Washington’s top federal prosecutor, U.S. Attorney Jeanine Pirro, said in a statement Friday that the mayor is “not under investigation, nor is she the target of any investigation.” A spokesperson for Pirro declined to further comment.
Asked about the investigation at a press conference Friday, Bowser said she had not been contacted by any federal officials and had not received any subpoenas, nor a target letter.
“I have checked our lawyers, and we have a regular kind of chain of who talks to who and we have not been contacted, not related to me or to anybody else as I’m aware,” Bowser said.
The trip in question included a stop in Doha, where the mayor met with international leaders on the issues of infrastructure, sports and education. She also promoted Washington as a destination for investment and tourism. Qatar donated $60,000 to help cover the cost of the trip for the mayor and members of her party.
Bowser told reporters Friday that it was “a business trip, a publicly noticed trip to promote Washington, D.C., in Qatar.”
“That’s what we did and we don’t have any bones about saying it,” she said. The mayor credited the trip with helping the city to keep two of its professional sports teams in the downtown area.
The scrutiny of the trip comes a time when the mayor is deciding whether to seek a fourth term.
It also comes at a critical moment when the city is responding to a government shutdown that has impacted businesses and a federal workforce as well as a continuing deployment of National Guard troops on the street through at least February 2026.
Washington, D.C
Conflicting reports about DOJ investigating Mayor Bowser’s foreign trip
The New York Times reported Thursday evening that the Department of Justice is investigating D.C. Mayor Muriel Bowser over a foreign trip she took that was at least partially paid for by Qatar, but a report from Axios later disputed the New York Times report.
Axios first reported a senior Trump administration official says Bowser’s “name was mentioned in something,” but that she is not under federal investigation. Axios says the unnamed official blamed the rumor of the investigation on a disgruntled fired FBI agent.
A Trump administration official later told News4 Investigative Reporter Ted Oberg that Bowser is not the target of a federal investigation.
The mayor’s office said Bowser did not have anything to say about the Times report Thursday night but will be taking questions Friday at an event already on her calendar.
Bowser went to Dubai in late 2023 with four executive staff members for a United Nations conference on climate change, the Times reported.
The investigation started after the mayor’s office incorrectly told reporters the Chamber of Conference paid for the trip.
Her office told News4 that after the trip they became aware of a “staff error,” which led to the lack of a standard donation agreement for travel expenses. That paperwork has since been correctly submitted, Bowser’s office said. They said they have a letter from Qatar confirming they paid tens of thousands of dollars for the trip for Bowser and her staffers.
It’s not unusual for outside organizations or governments to pay for such trips, but it appears the mayor’s office didn’t handle the reporting properly in the beginning.
D.C. Code requires city officials to file proper reporting paperwork for gifts and donations such as a trip.
The mayor’s office said they heard about an investigation when the Times called Thursday afternoon for comment.
“We have checked with our lawyers, and the District has not been notified of any investigation,” the mayor’s office said in a statement. “This was a business trip; DC representatives regularly travel to promote Washington as a destination for investment and growth.”
“In some cases, economic development funds are used for the business travel; in other cases, the host or organizer cover the expenses,” the statement said. “All proper paperwork for this standard donation is on file.”
Bowser previously has been asked about who paid for a trip to the Masters golf tournament – questions that have never fully been answered.
The investigation comes after the federal takeover of D.C. — and looming threat of another one — and as Bowser considers running for a fourth term.
Bowser was scheduled to attend a gala Thursday night where she was to receive an award for her work in the redevelopment of the RFK Stadium site.
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