The governor of the Bank of England, Andrew Bailey, has recognized that the United States “have a sense” to criticize global trade weights, and to support the concerns addressed by the Trump administration who deal with the economic failures of increasing tariffs and geopolitical uncertainty.
Bailey said at an event organized by the Institute of International Finance in Washington, and said the central bank “performed” the potential economic effects of President Trump’s comprehensive tariff measures before the bank’s next interest decision in May.
The governor’s comments came with high-stakes meetings organized by the International Monetary Fund (IMF) during a week, and marked his most conciliatory tone for the Trump era complaints about global trade. Bailey said that long-standing surpluses in large manufacturing exporters-especially in China-structural risks for the global economy.
“Scott Bessent (the US finance minister) has a point,” said Bailey. “There are problems with how the system works that ask more difficult questions about how the system works.”
He criticized China’s confidence in the weak domestic demand and export -oriented production and argued that the model was “not sustainable forever”. Bailey, an economic historian in the background, said that today’s global imbalances reflect the problems that the Bretton Woods institutions should tackle after the Second World War.
“The original Bretton Woods design focused on adapting the deficit countries,” he said. “At that time, the United States was the excess country in the world and now we have turned. We have to return symmetrical adjustments and responsibilities.”
His remarks follow an intervention by the US Finance Minister Scott Bessent, who asked the IMF and the World Bank to give up their focus on climate change and diversity and return to “macroeconomic core work”. In a sharp criticism, Besseter accused the IMF of being “Polyannaish” in its latest external sector report, and said the institution was not to confront China’s “globally distorting guidelines”.
While Bailey defended the multilateral system as essential for global stability, he agreed that the IMF should concentrate on its main task. “It is important that the multilateral institutions are committed,” he said, but added that “it is not the task of the IMF for imbalances of the police trade”.
The British government has also signaled the direction of Washington to some trade questions. Chancellor Rachel Reeves, who is also in Washington for the Spring meetings of the IMF and the World Bank, said that the global imbalances should be “reduced” and support for the removal of tariff and non-tariff obstacles are expressed in order to increase trade with the USA.
“The world has changed and we are in a new era of global trade,” said Reeves, adding that Great Britain will not lower in the domestic standards or vehicles in response to American requirements, but will continue to be open to comprehensive cooperation for economic and security partnerships.
The managing director of IMF, Kristalina Georgieva, has tried to achieve a conciliatory tone in view of the increasing pressure, and asked the excess economies to adapt and promise their guidelines to sharpen the focus of the IMF on combating the global economic imbalances.
However, the fears remain that the re-examination of multilateral institutions could lead to employees or downgrading programs by the Trump government that focus on net zero goals and gender-specific equity-and now in the fuel line of the White House.
While Bailey welcomed the continued membership of the USA in the IMF and the World Bank, he said that the current moment has seriously thought about how international financial institutions are structured and what role they play in preventing economic deviations. “The system is still working for eighty years from Bretton Woods,” he said. “But there are challenges that have to be addressed to ensure that it is suitable.”