Bessent says IMF and World Bank need reform and there's an 'opportunity
for a big deal' with China
[April 24, 2025] By
FATIMA HUSSEIN and CHRIS MEGERIAN
WASHINGTON (AP) — Treasury Secretary Scott Bessent leveled harsh
criticism at the operations of the World Bank and the International
Monetary Fund on Wednesday even as he tried to reassure nervous
investors that the United States would maintain its global leadership
role.
“America first does not mean America alone,” he said in a speech to the
Institute of International Finance, where he also promised support for
the multilateral banks’ core missions. "To the contrary, it is a call
for deeper collaboration and mutual respect among trade partners.”
Although Bessent said the IMF and the World Bank are “falling short,” he
did not call for the U.S. to withdraw from the institutions, as some
conservatives had advocated in a Project 2025 proposal created by the
Heritage Foundation.
He said the institutions “serve critical roles in the international
system. And the Trump administration is eager to work with them — so
long as they can stay true to their missions.”
It was the latest example of how Bessent, a former hedge fund manager
who keeps a close eye on the financial markets, has tried to calm the
economic turmoil as President Donald Trump tries to rewire international
trade through aggressive tariffs. But his efforts to provide clarity
have repeatedly bumped up against Trump, who has contradicted him on
policy changes or suggested that more tariffs are coming in ways that
have amplified a sense of uncertainty.
That same drama played out later on Wednesday as Trump suggested he
would choose tariff rates if no deals were reached.
“By the way, if we don’t have a deal with a company or a country, we’re
going to set the tariff,” Trump said from the Oval Office. “That will
happen, I would say, over the next couple of weeks ... over the next
two, three weeks we’ll be setting the number.”
Trump's launch and then delay of new tariffs has created uncertainty
about his policy goals, with the U.S. president indicating that he both
wants new agreements and tariff revenues in order to reduce income
taxes.
“That money is going to be used to reduce taxes,” Trump said. “We’re
going to get big, big tax breaks.”
The U.S. president also suggested that he might increase import taxes on
autos from Canada. Trump has a 25% tariff on autos, although there are
some exemptions related to the U.S.-Mexico-Canada Agreement, and
automakers are seeking other policy changes to minimize the tariff
burden. Trump has separate 25% tariffs on Canadian goods ostensibly to
address drug smuggling into the U.S.
"I really don't want cars from Canada," Trump said, “So when I put
tariffs on Canada, they're paying 25%, but that could go up in terms of
cars. When we put tariffs on, all we’re doing is we’re saying, ‘We don’t
want your cars, in all due respect.’”
Trump cautioned that he's not currently considering additional auto
tariffs, but he said there could be an increase.
After Bessent's remarks, reporters asked him about a Wall Street Journal
article that said the huge U.S. tariffs that the Republican president
has levied on China could be cut in half, citing unidentified people
familiar with the matter.
Bessent said: “I’d be surprised if that discussion is happening."
However, he said he expects “there’d have to be a de-escalation” from
Washington and Beijing’s trade confrontation.
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Treasury Secretary Scott Bessent speaks, Wednesday, April 23, 2025,
during the Institute of International Finance Global Outlook Forum
at the Willard Hotel in Washington. (AP Photo/Jacquelyn Martin)
 Trump had said on Tuesday that the
145% tariffs on China could “come down substantially." And then on
Wednesday, he told reporters that “everybody wants to be a part of
what we're doing" and “everyone's going to be happy.”
Later in the day, White House press secretary Karoline Leavitt said
on Fox News Channel’s “America Reports” that “there will be no
unilateral reduction in tariffs against China.”
“The president has made it clear China needs to make a deal with the
United States of America,” she said. "And we are optimistic that
will happen."
Still, Bessent's speech in Washington represented a broadside
against the IMF and the World Bank, which provide loans and other
financial support around the world.
He said the Trump administration “will leverage U.S. leadership and
influence at these institutions and push them to accomplish their
important mandates.”
Some of Bessent's criticisms echoed the Trump administration's
efforts to root out progressive ideology from federal institutions.
Bessent said the IMF “has suffered from mission creep” and “devotes
disproportionate time and resources to work on climate change,
gender and social issues.”
He said there were similar problems at the World Bank, which he said
“should no longer expect blank checks for vapid, buzzword-centric
marketing accompanied by half-hearted commitments to reform.”
Despite the criticism, Bessent's support for the IMF and World Bank
came as a relief for development bankers and analysts, who partly
expected an announcement of a U.S. withdrawal from the
organizations.
Last October, Jay Shambaugh, former undersecretary for international
affairs, alluded to a Project 2025 proposal for the U.S. to pull out
of the IMF and World Bank if Trump won the 2024 election. Shambaugh
said at the time that without U.S. leadership, “We would have less
influence and we would weaken these institutions. We cannot afford
that.”
Bessent instead, conveyed a message of deepening U.S. involvement
with the institutions. But one of the problems, Bessent said, is
that China is still treated like a developing country, which gives
it more favorable treatment from global institutions. With China as
the second-largest economy in the world, he said, “It's an adult
economy.”
Despite growing friction between Beijing and Washington, Bessent
said, “There is an opportunity for a big deal here.”
Bessent wants the U.S. to boost manufacturing while China increases
consumption, making its economy less reliant on flooding the globe
with cheap exports. “If they want to rebalance, let’s do it
together,” he said. “This is an incredible opportunity.”
Beijing said Wednesday that “exerting pressure is not the right way
to deal with China and simply will not work.”
___
Associated Press writers Didi Tang and Michelle L. Price contributed
to this report.
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