Protections necessary for markets to function properly: US officials

Protections necessary for markets to function properly: US officials
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DAVOS: As world leaders await to hear Donald Trump in Davos about his “America First” policy, top officials from his administration on Wednesday asserted protections are necessary for the markets to function properly but refused to comment on what the President will talk about, saying he himself makes changes to his speeches.

A number of world leaders in Davos, including Indian Prime Minister Narendra Modi, have spoken about an urgent need to shun protectionism.

Mr. Trump’s speech, scheduled for Friday, is being keenly awaited in the backdrop of his America First policies.

Addressing a press conference, Treasury Secretary Steven Mnuchin said the size of the U.S. delegation to Davos this year is testament to the scale of Mr. Trump’s work over the past year.

Commerce Secretary Wilbur Ross sought to brush aside criticism about lowering of corporate tax rates in the U.S. and said tax reductions impeding trade are a fallacy.

“The U.S. was an uncompetitive model before; now it’s on a very competitive one,” Mr. Ross argued.

On whether there is an asset bubble in the U.S., Mr. Mnuchin said what is happening in the country is a reflection of the programmes being put in place. “As we look at U.S. growth, it continues to look quite good and is a very attractive place to invest,” he added.

Asked about Canadian Prime Minister Justin Trudeau forming the Trans-Pacific Partnership (TPP) without U.S., he said, “We are fans of bilateral trading agreements. We believe in free and fair trade. Anyone who wants to do trade with us on reciprocal basis is free to do it. We’re looking to increase exports.”

On what is next for protections in the U.S., Mr. Ross listed property rights, steel and aluminium.

Regarding the globalisation versus “America First” debate at Davos, Mr. Mnuchin evaded any direct reply, but said it is an important forum and as the largest economy in the world, their objective is to be here to interact with important counterparts.

Mr. Ross, however, said, “Protections are essential to having markets operate properly, to have everyone play by the rules.”

On whether corporate tax rates are helping to boost investment, Mr. Mnuchin said, “The vote from the market is very positive. It’s up a lot, massive investment, many companies commit millions of dollars. Apple — what they’re bringing back in terms of cash, what they’re paying in taxes. 2.5 million people getting special bonuses. We’ve raised wages and bonuses. We couldn’t be happier with the response from business.”

On what Mr. Trump will say in his speech on January 26 and who will write it, he said, “The President makes all the changes to his speech himself. It’ll be driven by his thoughts and his agenda. I don’t think there will be any inconsistencies with what we’ve said today. He’s been on an extraordinary number of trips this year, and his interest in coming to Davos is to interact other world leaders and make sure they understand his agenda.”

Regarding the risk of triggering a trade war, Mr. Ross said trade wars are fought every single day.

“Unfortunately every single day there are various parties violating the rules and taking advantage. There have always been trade wars; the difference now is U.S. troops are now coming to the ramparts,” he said.

PTI