US fails to reassure Europe, Japan over 'Trumponomics'


- Reuters picFinance ministers and central bank governors from the United States, Canada, Japan, France, Germany, Italy and Britain are meeting in the Italian city of Bari to discuss the world economy, combating terrorist funding, cyber security and taxes.

"We must not backpedal on free trade as it has contributed to economic prosperity", Aso said. Trump has vowed to press for trade that is fair as well as open and benefits US workers, and has focused on bilateral, or country-to-country, relations.

"The emphasis was initially on a border tax, which is taxation, but also trade policy", said Italian Finance Minister Pier Carlo Padoan in an interview. While holding firm on that despite attempts to persuade him to give ground, Mnuchin said his colleagues were gaining a better understanding of what President Trump's policies mean for the USA and the rest of the world.

Treasury Secretary Steven Mnuchin said his meetings with world finance leaders have helped ease their concerns that the United States is moving to hard-edged protectionist trade policies. "Our approach is for more balanced trade, and people have heard that", Mnuchin told reporters.

Many G-7 countries had been particularly concerned about the US rolling out a border tax that could choke exports to the country.

Trump has proposed slashing the U.S. corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought back home.

A statement at the southern port of Bari mirrored watered-down trade language from the Group of 20 two months ago, but ministers afterwards suggested an increasingly pragmatic tone to the talks after a stilted start. The Organization for Economic Cooperation and Development, a group representing many advanced economies, has urged the lower its corporate tax rate.

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"To the extent people had patched their networks, this would have been prevented", said Mr. Mnuchin.

The United States believes the world's other rich economies are getting used to the policy plans of President Donald Trump, but Europe and Japan remain anxious about Washington's shift.

"While many potential policy responses are largely domestic, some of them require, by definition, a collective effort", it stressed.

Bank of France Governor Francois Villeroy de Galhau said continued uncertainty about USA policy could dampen optimism within the G-7 about the global economy's gradual recovery from the financial crisis that began almost a decade ago.

The G-7 countries are Canada, France, Germany, Japan, Italy, the United States and U.K., with representatives of the European Union also attending.

That divergence augurs for potential disagreements when the nations' leaders gather in Sicily later this month - an event which marks Trump's first major worldwide summit as U.S. President.

The group's agreements, presented in the form of a final statement, aren't legally binding; instead they represent the leaders' political commitment to follow through.