Mnuchin to brief G7 on Trump tax, regulatory plans: official

WASHINGTON (Reuters) - Finance officials from the Group of Seven industrial economies this week will discuss U.S. President Donald Trump’s tax and regulatory reforms, efforts to combat terrorist financing and a brightening economic picture, a senior U.S. Treasury official said on Wednesday.

FILE PHOTO: U.S. Secretary of the Treasury Steven Mnuchin discusses the Trump administration's tax reform proposal in the White House briefing room in Washington, U.S, April 26, 2017. REUTERS/Carlos Barria

U.S. Treasury Secretary Steven Mnuchin will brief his G7 counterparts on the Trump administration’s still-emerging plans to revamp the U.S. tax code with major cuts for businesses, review the Dodd-Frank financial reform law, invest in infrastructure, and ease business regulatory burdens, the official told reporters.

G7 ministers from Europe, Japan and Canada have expressed hope that the Thursday to Saturday meeting in the Adriatic port city of Bari, Italy will enlighten them on Trump’s agenda.

The Treasury official said the G7 finance ministers and central bank governors were meeting amid improving prospects for global and U.S. growth due in part to optimism over Trump’s agenda, and gains in Europe.

“Bottom line, things are starting to look a bit better, but there are some risks out there, including in the sort of ongoing relatively slow productivity growth around the world,” the official said.

He added that there were also risks in some emerging markets that could affect global growth, including China, as well as lingering legacy debt issues in Europe, such as those in Greece.

Some economists, including those from the International Monetary Fund, have expressed concern that Trump’s fiscal policies could stoke inflation and bring on faster-than-expected Federal Reserve rate hikes, while new U.S. trade barriers could also slow global growth. But the Treasury official did not identify these as potential economic risks.

The official repeated Mnuchin’s views that Europe should handle the resolution of Greek debt issues. He welcomed Greece’s recent deal with European lenders for tax and pension reforms, but said: “There’s still more work to put Greece on a sustainable path.”

The official declined to say how France’s new president-elect, Emmanuel Macron, might affect negotiations for Britain to exit the European Union, but said the United States will have a “good relationship” with the new French administration.

Mnuchin will challenge European leaders to tackle legacy problems with undercapitalized banks in some countries, the official said.

Discussion of the U.S. agenda for a “more fair, balanced, and reciprocal trading relationship” with its key partners will not be on the official G7 agenda, but will likely come up in Mnuchin’s bilateral meetings, the official said.

A key part of the G7 agenda will include strengthening efforts to combat illicit and terrorist financing, the official said. He added that this will include a discussion of sanctions against Russia and Iran.

Reporting by David Lawder; Editing by Chizu Nomiyama