Trump’s Quest To Undermine Multilateral Development Banks

In the postwar era, the multilateral development banks were created to facilitate global trade. Today, they are ‘America First’ targets.

Recently, the White House has been pushing its America First stance in the World Trade Organization (WTO) by controversial appeals to a “national security exception.” In response to the Trump tariffs, several WTO members have brought dispute settlement cases against the U.S.

World Bank is next in the firing line. Reportedly, the White House will announce David Malpass as the nominee for President of the World Bank, after Jim Yong Kim's resignation well before the end of his five-year term in 2022.

In the 2016 election, Malpass served as Trump’s economic advisor. A year later he was appointed Undersecretary for International Affairs in the U.S. Department of the Treasury. But he is an odd choice to head the World Bank - a bit like selecting a coal CEO to head the struggle against climate change.

An ‘America First’ World Bank

Like U.S. Representative of Trade Robert Lighthizer, Malpass began his political career in the 1980s Reagan administration seeking to contain the rise of Japan through the Section 301 of the 1974 Trade Act; the same unilateral legislation Trump is exploiting against China in the current trade dispute.

During his 15 years as chief economist at Bear Stearns, Malpass was not known for his economic foresight. A year before the global crisis, he wrote that "housing- and debt-market corrections will probably add to the length of the U.S. economic expansion." And amidst lingering crisis, he urged for higher interest rates.

During his tenure as Under Secretary of the Treasury for International Affairs, Malpass has taken an aggressive position against China. In early 2018, he slammed China’s “non-market behavior” advocating stronger responses. When Trump tariff wars began, some 20 career staff quit Malpass’s unit in less than a year opposing the administration’s unilateral trade policies and Malpass’s poor leadership style.

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Disclaimer: Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute ...

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