Steven Mnuchin will be point man for Trump’s “phenomenal” tax planby George Magnus / February 21, 2017 / Leave a comment
Last week Steven Mnuchin, President Trump’s nominee for Treasury Secretary, was finally confirmed by lawmakers. Another ex-Goldman Sachs banker, he joins those in the new administration deemed to be “pragmatists,” compared to those of a more ideological bent. Given that the appearance of normality passes for good news in Washington DC nowadays, it is perhaps noteworthy that Mnuchin got off to a decent start.
He has had amicable conversations with both UK Chancellor Philip Hammond and German Finance Minister Wolfgang Schauble. The Trump administration has only had kind words for Brexit Britain but Peter Navarro, who heads the National Trade Commission, had previously let fly at Germany over currency manipulation and unfair trade. More importantly, Mnuchin has had talks with Chinese officials: Vice Premier Wang Yang; Liu He, a minister and a close adviser to President Xi Jinping; People’s Bank of China Chairman Zhou Xiaochuan; and Finance Minister Xiao Jie.
These conversations were probably courteous introductions with both sides expressing the intention to co-operate and maintain the Strategic Economic Dialogue—a formal structure, established in 2006, under which US and Chinese officials regularly hold discussions. Combined with the silence from the more anti-free trade members of the administration, this suggests that for now at least, the risk of a trade conflict has been dialled back.
We can never know for sure, though, where the administration will go on these or indeed other matters. Donald Trump may allow the pragmatists headroom, but his campaign mindset is more in tune with the ideologues.
Though Mnuchin appears to have kicked off his relationship with China uneventfully, a US aircraft carrier strike group, led by the USS Carl Vinson, began patrols in the South China Sea this weekend—a day after China’s naval exercises finished. Two weeks ago in Tokyo, Defence Secretary James Mattis had said of the South China Sea, “at this time, we do not see any need for dramatic military moves at all.” Mattis is a pragmatist, so these manoeuvres are probably more about posturing than provocation.
Even so, they remind us that whatever the niceties about US-China relations day to day, there is deep-seated tension over both trade and security that threatens to erupt at any time. A more truculent stance by either side could easily come about as a distraction from domestic…