Bessent Criticizes IMF And World Bank, Pushes For US Leadership

US Treasury Secretary Scott Bessent delivered a pointed critique of the International Monetary Fund (IMF) and the World Bank on Wednesday, while emphasizing the United States’ commitment to maintaining a leadership role on the global stage. In a speech at the Institute of International Finance, Bessent called on these multilateral institutions to refocus on their core missions, but stopped short of advocating for a US withdrawal, as some conservative voices have suggested.

“America first does not mean America alone,” Bessent stated, reassuring investors who had expressed concerns about the US’s global engagement. “To the contrary, it is a call for deeper collaboration and mutual respect among trade partners.”

While acknowledging that both the IMF and the World Bank have been “falling short” in certain areas, Bessent did not endorse proposals—such as those in a Project 2025 report by the Heritage Foundation—that advocate for a US exit from these institutions. He emphasized that both the IMF and World Bank serve critical roles in the global financial system and reiterated the Trump administration’s desire to work with them, so long as they remain true to their foundational missions.

US-China Trade Tensions: A Window for Progress

During the same address, Bessent was asked by reporters to comment on a Wall Street Journal article that suggested the US might reduce its tariffs on China by half. While Bessent expressed skepticism about such discussions, he acknowledged that the US and China may need to de-escalate their trade tensions to move forward. President Donald Trump had previously indicated that the 145% tariffs on China could be reduced substantially, fueling speculation about the future of US-China trade relations.

Despite the ongoing friction between Washington and Beijing, Bessent expressed optimism about the potential for a comprehensive trade deal. “There is an opportunity for a big deal here,” he said, underscoring the importance of balancing US manufacturing growth with increased Chinese consumption. “If they want to rebalance, let’s do it together. This is an incredible opportunity.”

Chinese officials, however, maintained that pressure tactics would not work in their dealings with the US. “Exerting pressure is not the right way to deal with China and simply will not work,” a spokesperson stated.

Criticism of the IMF and World Bank: Calls for Reform

Bessent’s speech also included sharp criticisms of the IMF and World Bank’s operations. He accused the IMF of “mission creep,” claiming that the institution had diverted too much attention to issues like climate change, gender equality, and social justice at the expense of its core financial mandate. Similarly, he warned the World Bank that it could no longer expect the US to support vague initiatives or half-hearted reforms.

“We will leverage US leadership and influence at these institutions and push them to accomplish their important mandates,” Bessent asserted, echoing the Trump administration’s broader effort to reform federal institutions.

Despite these criticisms, Bessent’s remarks were seen as a relief by many within the development banking community, who had feared a potential US withdrawal. Last year, former undersecretary for international affairs Jay Shambaugh suggested that if Trump were re-elected, the US might pull out of the IMF and World Bank, a move that would significantly reduce American influence within these institutions. Bessent, however, conveyed a message of deeper US involvement, albeit with a focus on reform.

One major point of contention for Bessent was the continued preferential treatment of China by global institutions. As the world’s second-largest economy, China, according to Bessent, should no longer be considered a developing nation. “It’s an adult economy,” he said, urging a reevaluation of China’s status within these institutions.

In conclusion, while Bessent’s speech highlighted his administration’s commitment to strengthening the US’s role in global financial institutions, it also underscored the Trump administration’s desire for reform and a more pragmatic approach to international cooperation.