Treasury Secretary Steven Mnuchin went to Indonesia this week intending to push President Donald Trump’s tough stance on China with US allies — but found himself once cast as the administration’s defender-in-chief.
With a growing crisis surrounding the administration’s hesitant response to the disappearance of a Saudi dissident journalist, Mnuchin twice faced questions about whether he would attend an upcoming investor conference in Riyadh amid calls for the administration to back away from its close relationship with the Saudis.
“For now, I am,” Mnuchin told reporters at a press conference early Saturday on the sidelines of the International Monetary Fund’s annual meeting of foreign finance chiefs and central bankers in Bali, Indonesia. “If more information comes out over the next week, I will obviously take that into account.”
“We all want information,” said Mnuchin.
Jamal Khashoggi, a Washington Post columnist and US resident, hasn’t been seen since going to the Saudi consulate in Istanbul on Oct. 2 to collect marriage documents. In recent days, Turkish authorities have obtained audio and visual evidence that shows he was murdered inside the consulate, a source familiar with the ongoing investigation told CNN.
Saudi authorities have denied any knowledge about the case. Trump said Friday he intends to call Saudi King Salman “at some point” to discuss the issue but repeated in “60 Minutes” interview excerpts released Saturday that the Saudis “deny it every way you can imagine.”
The President added: “We’re going to get to the bottom of it and there will be severe punishment.” He also suggested that if the Saudis were found responsible, there would be “harsh” ways to punish them that would not involve canceling a multi-billion-dollar deal for arms sales inked last year.
Mnuchin, a onetime investment banker, was also repeatedly called on to explain away his boss’ sharp criticism of Jerome Powell, the Federal Reserve chairman, Trump himself picked amid market turmoil, the latest instance of the President throwing off norms about presidents refraining from comment on decisions taken by the central bank.
“That’s the President’s prerogative to make comments,” said Mnuchin at the press conference. “The President has made clear that he liked lower rates as opposed to higher rates and that he’s concerned that if the Fed raises rates too quickly that could have an impact on our growth.”
The President’s assertions in successive interviews that his Federal Reserve chairman is “crazy” or “loco” for raising rates cast a shadow over the meeting of government finance chiefs, prompting even International Monetary Fund managing director Christine Lagarde and Bank of England Governor Mark Carney to rise to his defense.
The President’s remarks blasting the Fed came at a time when Mnuchin’s job is to press forward on trade talks with Japan and the European Union — all part of the administration’s broader strategy to exert more pressure on China amid a growing trade war and ahead of the critical G20 summit in November, where Trump and Chinese President Xi Jinping may meet directly.
Mnuchin told reporters that “no-preconditions” had been set for a leader’s meeting later this year and the President would ultimately make a decision.
“It’s incredibly difficult to create a coalition, if you yourself are being isolated in response to your policies, to your posture or your rhetoric — or any combination thereof,” said Tim Adams, president and chief executive of the Institute for International Finance in an interview on the sidelines a conference of international bankers.
“If that’s their objective, then they are certainly hamstringing their capacity to do it,” said Adams, who also served as former undersecretary for international affairs at the Treasury Department under President George Bush.
It’s certainly not the first time Mnuchin has had to smooth over in an international setting Trump’s public criticism of the Federal Reserve or explain the administration’s trifecta economic plan of tax cuts, streamlining regulations and “free, fair and reciprocal” trade deals.
At one of his first appearances on the world stage last year, Mnuchin was charged with the job of easing the minds of finance chiefs of the six largest economies over the President’s charged rhetoric on trade.
“People feel a level of comfort in understanding the Trump administration’s policies, now that we have had the ability to interact a few times,” Mnuchin told reporters in a news conference at the close of the G7 summit in Bari, Italy.
“We don’t want to be protectionist,” he said then. “But we reserve our right to be protectionists to the extent that we believe that trade is not free or fair.”
Then, there was the finance chiefs summit in the ski resort town of Whistler, Canada.
Hours before the G7 finance meeting hosted by Canada commenced, President Trump unleashed steel and aluminum tariffs against Mexico, the European Union and its northern neighbor.
At that meeting, the secretary found himself largely isolated.
With Japanese Finance Minister Taro Aso telling reporters during the summit he almost “felt sorry” for Mnuchin given the heft of complaints on trade.
Then six US allies took a rare step of issuing a joint G7 statement without the support of the United States, deriding the administration’s trade practices. They collectively asked Mnuchin to share their “unanimous concern and disappointment” to the US president, suggesting his recent trade actions would incite uncertainty, and dampen the goal of economic growth.
“The Americans have decided — in our mind — to take an action that is not at all constructive. It’s actually destructive in our ability to get something done around tariffs on steel and aluminum,” Canadian Finance Minister Bill Morneau told reporters at the closing press conference of the G7 summit in Whistler.
And just moments before Morneau began his closing press conference at the meeting, Trump fired yet another warning shot on Twitter he wasn’t backing down.
“If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!” the president tweeted in June.
Mnuchin was a key campaign supporter for the president, traveling extensively with Trump on the campaign trail. A steadfast loyalist, Mnuchin has managed to avoid the public clashes that have led to the resignation or firings of other senior officials, including former Secretary of State Rex Tillerson and former national economic council director Gary Cohn.
Mnuchin has been careful this week to send an assuring message since arriving at the summit early Thursday that recent market volatility is simply a “normal correction,” despite the president’s high-profile remarks that the Fed is “making a mistake” by raising interest rates triggering the market rout.
“The fundamentals of the US economy couldn’t be stronger,” said Mnuchin in an interview with CNN early Thursday. “I see this as a normal correction.”
