US has rejected isolationism – Yellen

WASHINGTON, DC — US Treasury Secretary Janet Yellen appeared to take aim at former President Donald Trump’s economic approach on Tuesday, saying the current US administration has “rejected the isolationism that made America and the world worse “.

His opening remarks at a press conference two weeks before the US presidential election come as the International Monetary Fund (IMF) also issued a warning about a global increase in tariffs.

World financial leaders are gathering in Washington this week for a series of meetings organized by the IMF and the World Bank.

The fund warned in its latest World Economic Outlook that tariffs “affecting a significant share of world trade” could hurt global growth.

Trump has called for a 10% to 20% tariff on all US imports and a higher rate of 60% or more on those from China.

But broad tariffs among major trading blocs, along with other policies, could reduce global gross domestic product (GDP) by 0.8 percent by 2025, the IMF said in an analysis.

Trump’s rival, Democratic Vice President Kamala Harris, is part of an administration that has instead favored tariffs aimed at China.

The two sides have been neck and neck in polls leading up to the November 5 election.

Yellen warned on Tuesday that broad-based tariffs could hit domestic consumer prices and hurt the competitiveness of companies that rely on imports.

He argued that President Joe Biden’s administration has “pursued global economic leadership” to the benefit of the US public and economy.

“I am convinced that the sustained American economic leadership and commitment to the partners that we first restored and then strengthened over the past three and a half years will be indispensable as we move forward,” she told reporters Tuesday.

U.S. businesses are bracing for the possibility of more taxes as they monitor Trump’s campaign proposals.

On Tuesday, the IMF released risk assessments on its economic projections, modeling a scenario in which trade tensions lead to a permanent increase in tariffs and the United States, the euro zone and China impose a rate of 10 percent to trade flows between the three regions.

His scenario also included a 10 percent tariff on trade flows between the United States and other countries around the world.

“Rising tariffs directly affects about a quarter of trade in goods,” he noted.

The scenario also called for a 10-year extension of the Trump administration’s tax cuts, along with other changes such as reductions in net migration.

Apart from the impact of global GDP on the combined effects of this situation, US GDP would also fall by about 1 percent relative to the IMF’s baseline in 2025.