The Trump administration's priority is boosting US growth through tax cuts and an overhaul of regulations, and a growing American economy will be good for the world, Treasury Secretary Steven Mnuchin said Thursday.
Cutting corporate taxes to encourage US firms to repatriate "trillions of dollars" in foreign earnings currently stashed in offshore accounts will drive investment and growth, he said.
"What's good for the US economy is good for the global economy," Mnuchin said in a discussion at the Institute for International Finance.
The US official said the administration's key focus is around fair and balanced trade and investment, but he steered clear of the tensions among finance officials gathered for the semi-annual meeting of the International Monetary Fund due to the worrisome protectionist rhetoric out of Washington.
This has created a strained atmosphere at the usually staid and formulaic meetings, as Trump officials have focused on attacking individual countries for their trade surpluses with the United States, and dismissed the IMF concerns as "rubbish."
Mnuchin said US corporate tax rates are among the highest in the world, and have caused companies to understandably park their earnings offshore.
"It's about making business taxes competitive and bringing back what we think will be trillions of dollars to invest," he said.
Asked whether a huge tax cut would enlarge the US budget deficit, Mnuchin acknowledged there would be an impact but said it will balance out once the positive growth anticipated from the increased investment is factored in, a calculation method known as "dynamic scoring."
"It will pay for itself with growth," he said of the tax plan which he expects to introduce before the end of the year.
Treasury also is working on a report for President Donald Trump in early June on how to reduce the regulatory burden in the financial system.
The goal is to "make sure banks have liquidity so they can lend" but at the same time ensuring they do not become a burden to taxpayers should they run into difficulties.
Treasury has been holding meetings with banking and finance officials about how the regulations are working, and he said "we're going to make sure all these rules make sense."
That plan to revamp regulations also has rung alarm bells at the IMF and elsewhere, as officials warn of the dangers of rolling back the regulations put in place in the wake of the 2008 financial crisis to curb risky market excesses.
"Let's not forget the lessons we learned," German Finance Minister Wolfgang Schaeuble said earlier Thursday.