Trump 2.0 Haunts World Economy Chiefs Gathering in Washington Before Vote

The world's financial leaders are gathered in Washington, ostensibly to discuss technical stuff: debt, inflation, interest rates. What's really on their minds is Donald Trump.

The ex-president's potential return to the White House has loomed large over this week's annual meetings of the International Monetary Fund and World Bank. At public seminars and panels, or behind closed doors at steak-house dinners, discussion kept turning to the vote that's less than two weeks away.

“Everybody is talking about the US election and waiting with bated breath,” Malaysia's second finance minister Amir Hamzah Azizan said in an interview.

That's because of the starkly different visions the two candidates are offering for the world's biggest economic power, which some officials speak of alongside top risks to global stability such as wars in Ukraine and the Middle East. 

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Vice President Kamala Harris mostly represents continuity, while Trump is threatening to upend global trade even more than he did in his first term, by slapping tariffs of 60% on China and as much as 20% on everyone else.

The outcomes for policy are far enough apart as to be a source of “high uncertainty,” in the words of one top IMF official, at a time when the world economy is otherwise on track for a soft landing and investors are generally upbeat.

“Markets hate uncertainty, and the biggest uncertainty of them all is hanging over these meetings: Who will be the next president of the United States?” said Josh Lipsky, director of the Washington-based Atlantic Council's GeoEconomics Center. “It matters for everyone.”

Kamala Harris, Donald Trump

On the meeting's sidelines, there were plenty of events for attendees absorbed by the election guessing game.

Goldman Sachs Group Inc. hosted a client dinner keynoted by star pollster Nate Silver. The Institute of International Finance had Mike Pompeo, who served as Trump's secretary of state, among its dinner guests. At a JPMorgan Chase & Co. investor seminar, with one session titled “Is a Trump Win Inevitable?”, speakers on the agenda included Jim Messina, deputy chief of staff in the Obama administration, and senior Trump adviser Scott Bessent.

Financial diplomats were generally careful not to sound like they favored one candidate over the other. And most tried to avoid even mentioning Trump by name.

Still, some sought to paint a sanguine picture regardless of who's elected — highlighting the resilience of the US economy and the fact that Trump's first term already offered guidance about how to negotiate with him.

Pakistan's Muhammad Aurangzeb

Pakistan Finance Minister Muhammad Aurangzeb said his nation will ensure the US remains a major trade partner regardless of happens with policy.

That's been the case under “various administrations which have come in,” he said in an interview. “So all hands on deck from our side to ensure that it remains so.”

The Washington-based IMF and World Bank symbolize an era of barely-contested American supremacy in the world economy. That faces new challenges now, including from the BRICS group of emerging markets. Its leaders met in Russia this week, where host Vladimir Putin hailed a new “multipolar world.”

Although Trump has been skeptical of Western-led multilateral institutions in the past, World Bank President Ajay Banga expressed optimism that the GOP candidate — if elected — would see the value of the lender's ability to leverage resources, rather than opting for the US to go it alone. 

“Let's wait to see what comes out of the elections,” said Banga, who was nominated by President Joe Biden. “Let's engage with the presidency with the respect it deserves.”

ECB's Christine Lagarde

European Central Bank Chief Christine Lagarde said whoever wins the election should tread carefully with trading partners.

“Periods of restrictions and barriers have not been periods of prosperity and strong leadership around the world,” she said at an event in the US capital. Whoever becomes the next US president “should at least bear that in mind.”

Across town at a Morton's steakhouse on Wednesday night, Gavekal Research – a China-focused advisory firm – hosted a discussion that revolved around trade policy and tariffs if Trump wins. The vibe among speakers, and an audience largely made up of finance-industry executives, was that he's in pole position right now. 

“People have told us that he's still really mad because of Covid and Xi Jinping costing him the last election,” said the firm's head of research, Arthur Kroeber. “So he's going to come in with a very negative view.”