Mnuchin: Trade deals boosting US growth, Boeing 737 MAX a drag

US Treasury Secretary Steven Mnuchin attends a session at the Congress centrE during the World Economic Forum (WEF) annual meeting in Davos, January 21, 2020. — AFP pic
US Treasury Secretary Steven Mnuchin attends a session at the Congress centrE during the World Economic Forum (WEF) annual meeting in Davos, January 21, 2020. — AFP pic

DAVOS, Jan 21 — Recent trade deals with China and neighbouring Mexico and Canada will boost growth in the United States this year but the ongoing crisis surrounding Boeing’s 737 MAX airliner is weighing on performance, US Treasury Secretary Steven Mnuchin said on Tuesday.

Mnuchin said at the World Economic Forum in Davos that he found the latest projections of the International Monetary Fund (IMF) — which trimmed its forecast for US growth to 2.0 per cent this year and to 1.7 per cent in 2021 — to be overly pessimistic.

He said he believed that issues including the grounding of of Boeing 737 MAX plane had shaved some 0.5 to 0.7 of a percent point off the US growth rate. The 737 MAX was grounded worldwide March 13, 2019 after two crashes claimed the lives of 346 people.

Meanwhile growth in the US had also “clearly been held back by a slowdown around the world,” he added.

But he added: “When we look at the forecast for 2020, business looks very good and there is no question the two trade deals will have an impact.”

The US Senate this month voted to approve a new trade agreement linking the United States, Canada and Mexico. The United States and China also signed a long-awaited, if partial, deal to ease trade frictions.

“There is no question the US economy is outperforming the rest of the world,” Mnuchin told the forum, following a bullish speech by President Donald Trump where he touted the prowess of the American economy.

“We think these predictions (from the IMF) are too low for 2020,” Mnuchin said, while acknowledging that “how much the MAX takes to get back into action may have an effect.” — AFP

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