Yellen says world was ‘worse’ under Trump-era isolationism

Yellen opened the annual meetings of the IMF and World Bank by highlighting economic growth in the United States as the country finds itself in the grip of the COVID-19 pandemic. Without mentioning Trump by name, she said in her speech that the Biden administration had ended a period of international isolationism that had “made America and the world worse off.”

“We’ve gone from millions of people losing their jobs to a historic recovery in the labor market,” Yellen said. She said U.S. economic growth was “nearly twice as fast as most other developed countries this year and last, even as inflation fell earlier.”

The IMF released its international forecast for the global economy on Tuesday morning and raised its forecast for the US economy this year while lowering growth expectations in Europe and China.

The IMF expects the US economy – the world’s largest – to grow 2.8% this year, down slightly from 2.9% in 2023 but an improvement on the 2.6% it forecast for 2024 back in July. Growth in the United States was driven by strong consumer spending, supported by strong inflation-adjusted wage growth.

The meetings mark the last major international financial meeting held under the Biden administration and come as economic issues are a top concern for American voters. Republicans blamed the Biden-Harris administration for inflation, which reached a 40-year high and then fell. Trump campaign spokeswoman Caroline Leavitt said in a statement that the Biden-Harris administration has “created an inflation crisis, record high gas prices, skyrocketing mortgage and interest rates, resulting in the lowest levels of consumer and small business confidence in decades.” “

Voters remain divided on whether they prefer Republican nominee Trump or Democratic Vice Presidential nominee Kamala Harris to handle key economic issues, according to an October poll from The Associated Press-NORC Center for Public Affairs Research.

Whoever wins the US election will also have a huge impact on global finance and the global economy.

Trump and Harris have said little about their plans for the International Monetary Fund and the World Bank. But they have different views on trade, tariffs and other economic issues. Trump is skeptical of global financial institutions and promises high tariffs if elected. Harris is likely to continue the Biden administration’s approach of prioritizing international cooperation over threats, although she has supported some tariffs.

Yellen, like other federal officials, is prohibited from engaging in partisan political activity under the Hatch Act, and she chose her words carefully in her speech. But she praised the Biden-Harris initiatives on climate, health care, infrastructure spending and other areas.

She referenced Trump’s international leadership, saying, “From day one, we have rejected the isolationism that has left America and the world worse off and strived for global economic leadership that supports economies around the world and delivers significant benefits to the American people and the U.S. economy.”

Trump, who is an isolationist and critical of multilateral institutions, promises as president to impose a 60% tariff on all Chinese goods and a “universal” tariff of 10% or 20% on everything else that comes into the United States, insisting cost Taxation of imported goods is absorbed by the foreign countries that produce those goods.

Leading economists say it would amount to a tax on American consumers that would make the economy less efficient and lead to higher inflation in the United States.

The Biden-Harris administration did not reverse tariffs imposed on China under the Trump administration, and in May also imposed major tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment.