The US and IMF disagree about China. That’s a problem.
Subscribe to enjoy similar stories. Eighty years ago world leaders meeting in Bretton Woods, N.H., created the International Monetary Fund to prevent the sorts of economic imbalances that had brought on the Great Depression. Today, imbalances once again threaten global harmony.
China’s massive trade surplus is fueling a backlash. The U.S. attributes those surpluses to China holding down consumption while subsidizing manufacturing and exports, inflicting collateral damage on its trading partners.
And it would like the IMF to say so. The IMF, though, has steered a more neutral path. It has prodded Beijing to change its economic model while playing down any harm from that model for the world.
Decades ago, U.S. leaders thought bringing China into the postwar economic institutions such as the IMF and World Trade Organization would make Beijing more market-oriented and the world more stable. They now think the opposite.
China has doubled down on an authoritarian, state-driven economic model that many in the West see as incompatible with their own. The IMF, the world’s most influential international economic institution, may find itself torn between irreconcilable visions of the global economy, especially if former President Donald Trump is re-elected next month. Trump has prioritized reducing the trade deficit, especially with China, through tariffs, an approach the IMF has criticized.
Many of his advisers are deeply suspicious of both Beijing and international institutions. Some have even suggested the U.S. should leave the IMF, though there is no sign Trump agrees.
The U.S. has been upset about China’s trade surplus at least since it joined the World Trade Organization in 2001, wiping out U.S. factory jobs in what became
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