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There will be much to chew over at the International Monetary Fund’s (IMF) spring meetings this week.

Central bankers and finance ministers will descend on Washington for its latest bi-annual gathering, a place where politicians and academics converge, all of them trying to make sense of what’s going on in the global economy.

Everything and nothing has changed since they last met in October – one man continues to dominate the agenda.

Six months ago, delegates were wondering if Donald Trump could win the election and what that might mean for tax and tariffs: How far would he push it? Would his policy match his rhetoric?

Donald Trump. Pic: Reuters
Image:
Donald Trump. Pic: Reuters

This time round, expect iterations of the same questions: Will the US president risk plunging the world’s largest economy into recession?

Yes, he put on a bombastic display on his so-called “Liberation Day”, but will he now row back? Have the markets effectively checked him?

Behind the scenes, finance ministers from around the world will be practising their powers of persuasion, each jostling for meetings with their US counterparts to negotiate a reduction in Trump’s tariffs.

That includes Chancellor Rachel Reeves, who is still holding out hope for a trade deal with the US – although she is not alone in that.

Read more:
PM and Trump step up trade talks
Ed Conway on the impact of US tariffs

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Could Trump make a deal with UK?

Are we heading for a recession?

The IMF’s economists have already made up their minds about Trump’s potential for damage.

Last week, they warned about the growing risks to financial stability after a period of turbulence in the financial markets, induced by Trump’s decision to ratchet up US protectionism to its highest level in a century.

By the middle of this week the organisation will publish its World Economic Outlook, in which it will downgrade global growth but stop short of predicting a full-blown recession.

Others are less optimistic.

Kristalina Georgieva, the IMF’s managing director, said last week: “Our new growth projections will include notable markdowns, but not recession. We will also see markups to the inflation forecasts for some countries.”

She acknowledged the world was undergoing a “reboot of the global trading system,” comparing trade tensions to “a pot that was bubbling for a long time and is now boiling over”.

She went on: “To a large extent, what we see is the result of an erosion of trust – trust in the international system, and trust between countries.”

IMF Managing Director Kristalina Georgieva holds a press briefing on the Global Policy Agenda to open the IMF and World Bank's 2024 annual Spring Meetings in Washington, U.S., April 18, 2024. REUTERS/Kevin Lamarque
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IMF managing director Kristalina Georgieva. Pic: Reuters

Don’t poke the bear

It was a carefully calibrated response. Georgieva did not lay the blame at the US’s door and stopped short of calling on the Trump administration to stop or water down its aggressive tariffs policy.

That might have been a choice. To the frustration of politicians past and present, the IMF does not usually shy away from making its opinions known.

Last year it warned Jeremy Hunt against cutting taxes, and back in 2022 it openly criticised the Liz Truss government’s plans, warning tax cuts would fuel inflation and inequality.

Taking such a candid approach with Trump invites risks. His administration is already weighing up whether to withdraw from global institutions, including the IMF and the World Bank.

The US is the largest shareholder in both, and its departure could be devastating for two organisations that have been pillars of the world economic order since the end of the Second World War.

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Here in the UK, Andrew Bailey has already raised concerns about the prospect of global fragmentation.

It is “very important that we don’t have a fragmentation of the world economy,” the Bank of England’s governor said.

“A big part of that is that we have support and engagement in the multilateral institutions, institutions like the IMF, the World Bank, that support the operation of the world economy. That’s really important.”

The Trump administration might take a different view when its review of intergovernmental organisations is complete.

That is the main tension running through this year’s spring meetings.

How much the IMF will say and how much we will have to read between the lines, remains to be seen.

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White House reportedly mulling pardon for Binance founder CZ

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White House reportedly mulling pardon for Binance founder CZ

White House reportedly mulling pardon for Binance founder CZ

Binance co-founder Changpeng Zhao said that being considered for a presidential pardon from Trump would be “great news if true.”

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US and China soften trade rhetoric, giving analysts hope of market rebound

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US and China soften trade rhetoric, giving analysts hope of market rebound

US and China soften trade rhetoric, giving analysts hope of market rebound

Tensions between the two countries appear to have cooled off on Sunday, as representatives from both sides signal a willingness to negotiate.

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Fears Trump may lose focus after praise for Gaza peace deal at Egypt summit

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Britain has been playing a role behind the scenes of Trump's deal between Israel and Hamas | Beth Rigby

Sir Keir Starmer will on Monday join world leaders at a historic summit in Egypt to witness the signing of the Gaza peace plan to end two years of conflict, bloodshed and suffering, that has cost tens of thousands of lives and turned Gaza into a wasteland.

Travelling over to Egypt, flanked by his national security advisor Jonathan Powell, the prime minister told me it was a “massive moment” and one that is genuinely historic.

US President Donald Trump moved decisively last week to end this bloody war, pushing Israeli Prime Minister Benjamin Netanyahu and Hamas into a ceasefire as part of his 20-point peace plan.

Pic: AP
Image:
Pic: AP

In the flurry of the following 48 hours, Mr Starmer and another twenty or so leaders were invited to Egypt to bear witness to the signing of this deal, with many of them deserving some credit for the effort they made to bring this deal around, not least the leaders of Qatar, Egypt and Turkey, who pressed Hamas to sign up to this deal.

On Monday, the remaining 20 living hostages are finally set to be released, along with the bodies of another 28 who were either killed or died in captivity, and aid is due to flow back into a starving Gaza.

Some 1,200 Israelis were killed on 7 October 2023, with another 250 taken hostage. In the subsequent war, most of Gaza’s two million population has been displaced. More than 67,000 Gazans have been killed, according to Palestinian health officials

Then, the signing ceremony is due to take place on Monday afternoon in Sharm el-Sheikh. It will be a momentous moment after a long and bloody war.

More on Israel-hamas War

But it is only just the beginning of a long process to rebuild Gaza and try to secure a lasting peace in the region.

The immediate focus for the UK and other nations will be to get aid into Gaza with the UK committing £20m on Monday for water, sanitation and hygiene services for Gazans.

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Humanitarian aid rolls into Gaza

But the bigger focus for the UK and other European allies is what happens after the hostages are released and Israel withdraws its troops.

Because what happens next is a much bigger and more complicated task: rebuilding Gaza; turning it into a terrorist-free zone; governing Gaza – the current plan is for a temporary apolitical committee; creating an international stabilisation force and all the tensions that could bring about – which troops each side would allow in; a commitment for Israel not to occupy or annex Gaza, even as Netanyahu makes plain his opposition to that plan.

The scale of the challenge is matched by the scale of devastation caused by this brutal war.

The prime minister will tomorrow set out his ambition for the UK to play a leading role in the next phase of the peace plan.

Back home the UK is hosting a three-day conference on Gaza’s recovery and reconstruction.

Last week, France hosted European diplomats and key figures from Middle Eastern countries, Egypt, Jordan, Saudi Arabia and Qatar and later this week, the German chancellor is hoping to organise a conference on the reconstruction of Gaza with the Egyptians.

But in reality, European leaders know the key to phase two remains the key to phase one: and that’s Donald Trump.

As one UK figure put it to me over the weekend: “There is lots of praise, rightly, for the US president, who got this over the line, but the big challenge for us post-war is implementing the plan. Clearly, Arab partners are concerned the US will lose focus”.

The prime minister knows this and has made a point, at every point, to praise Mr Trump.

Bridget Phillipson and Mike Huckabee. Pics: Sky/AP
Image:
Bridget Phillipson and Mike Huckabee. Pics: Sky/AP

His cabinet minister Bridget Phillipson learned that diplomatic lesson the hard way on Sunday when she was publicly lambasted by the US ambassador to Israel Mike Huckabee for suggesting to my colleague Trevor Phillips that the UK “had played a key role behind the scenes” and failed to mention Mr Trump by name.

“I assure you she is delusional,” tweeted Governor Huckabee. “She can thank @realDonaldTrump anytime just to set the record straight”.

On Monday, leaders will rightly be praising Mr Trump for securing the breakthrough to stop the fighting and get the remaining hostages home.

People hug next in Hostages Square. Pic: Reuters
Image:
People hug next in Hostages Square. Pic: Reuters

But this is only the beginning of a very long journey ahead to push through the rest of the 19-point plan and stop the region from falling back into conflict.

Britain has, I am told, been playing a role behind the scenes. The PM’s national security adviser Mr Powell was in Egypt last week and has been in daily touch with his US counterpart Steve Witkoff, according to government sources. Next week the King of Jordan will come to the UK.

Part of the UK’s task will be to get more involved, with the government and European partners keen to get further European representation on Trump’s temporary governance committee for Gaza, which Tony Blair (who was not recommended or endorsed by the UK) is on and Mr Trump will chair.

The committee will include other heads of states and members, including qualified Palestinians and international experts.

As for the former prime minister’s involvement, there hasn’t been an overt ringing endorsement from the UK government.

It’s helpful to have Mr Blair at the table because he can communicate back to the current government, but equally, as one diplomatic source put it to me: “While a lot of people in the Middle East acknowledge his experience, expertise and contact book, they don’t like him and we need – sooner rather than later – other names included that Gulf partners can get behind.”

On Monday it will be the US, Egypt, Qatar and Turkey that sign off on the peace plan they directly negotiated, as other Middle Eastern and European leaders, who have flown into Sharm el-Sheikh to bear witness, look on.

But in the coming days and weeks, there will need to be a big international effort, led by Mr Trump, not just to secure the peace, but to keep it.

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