Mnuchin calls for strengthening trade policy and containing debt

Washington. Steven Mnuchin, Donald Trump’s former Treasury secretary, said he will not seek to join the president-elect’s new administration but is ready to offer advice to his successor, including on how to strengthen sanctions on Iran and Russia and contain debt growth. American.

In an interview, Mnuchin told Reuters it was important for the Treasury to work to strengthen US trade policy. This includes holding Beijing to its commitments to purchase American goods in Trump’s January 2020 Phase One deal to rebalance trade between the United States and China, which he says “they are not fulfilling.”

Serving as Treasury chief during Trump’s first term “was the experience of a lifetime, and I’m happy to advise from the sidelines,” Mnuchin said Friday. “I’m sure they’ll have a lot of great options.”

He declined to name a favorite.

Reuters reported on Friday that two prominent hedge fund investors, Scott Bessent, founder of Key Square Group, and John Paulson had emerged as leading contenders for Treasury secretary, and that Bessent had met with Trump.

Mnuchin founded Liberty Strategic Capital, a private equity firm, after leaving office with investments from Softbank Group and Abu Dhabi sovereign wealth fund Mubadala.

Economic equipment

Mnuchin said it was important for all parts of Trump’s economic team – the Treasury, the Commerce Department, the US Trade Representative’s office and the White House National Economic Council – to work closely as a group, as they did during trade and tariff negotiations with China in 2018 and 2019.

Mnuchin, a former Goldman Sachs executive, said it’s important for the Treasury secretary to have experience in financial markets, but so is a strong management record. This is because the Treasury covers vast areas of the economy, from regulatory and tax policy to international sanctions, and the latter will take considerable time during its mandate, he said.

The United States needs stricter enforcement of financial sanctions and more action to cut off oil revenues from Iran and Russia, he said, noting that sanctions on Russia for its war in Ukraine have been “more headline-grabbing” than effective.

The G7-imposed $60 per barrel price ceiling on Russian crude may be reducing Russian oil revenues, but “Russia is selling a lot of oil and gas,” he added.

These actions must be combined with increased U.S. oil and gas production and increased output from other Middle Eastern countries to offset reduced supplies from Russia and Iran due to sanctions and keep prices stable, he said. Mnuchin.

Deficit management

Asked whether Trump’s plans to extend individual tax cuts that expire next year and end taxes on tips, Social Security and overtime earnings would worryingly increase America’s debt, Mnuchin said: It was necessary to control the growing deficits.

In his opinion, Congress and the administration can find a balance between extending tax cuts and saving discretionary and non-discretionary spending. Some revenue will be offset by stronger economic growth and Trump’s higher tariffs, he added.

Mnuchin defended the Trump administration’s heavy spending on COVID-19 relief that, along with a collapse in revenue during the pandemic, led to a record $3.1 trillion deficit in fiscal 2020, but said the Biden administration I had spent more than necessary.

The US deficit in fiscal year 2024, ending September 30, surpassed $1.8 trillion, the highest outside of the COVID era, as interest costs on public debt surpassed $1 trillion for the first time. of dollars.

“I think the spending we did for COVID was necessary, or there would have been a global depression, not a recession,” Mnuchin said. “But I think the Biden administration’s continued spending clearly created inflation and created large deficits, and that has to be addressed.”