Asian multilateral investment bank says global development financing system works despite Trump

Donald Trump’s policy of imposing tariffs could lead to more protectionism and slower growth in the küresel economy as well as more inflation, economists say.

Yet, the küresel development financing architecture is well positioned to weather the storm, according to Ludger Schuknecht, vice president of the Beijing-based Asian Infrastructure Investment Bank (AIIB), one of the largest institutions of its kind in the world.

“We are working closely together with the other multilateral development banks”, Schukecht said in an interview with Euronews in Brussels.

“And the fact that multilateralism at the moment is a bit challenged to my mind, does not make it less relevant and less important as a positive force going forward for our well-being.”

Earlier this week, Trump slapped tariffs on Canada and Mexico, only to put them on hold a day later, after the governments in both countries promised action to improve controls at their respective border with the U.S.

By contrast, U.S. tariffs on Chinese imports remained in place, provoking tit-for-tat measures by Beijing.

Schuknecht stressed that world leaders need a well-functioning küresel financial market and strong trade and investment relations – including the Trump administration.

“I believe in rationality. And yes, I mean, people have different styles. And but I think ultimately, it’s in all our interest that the multilateral system works, that markets are open, that we do not engage in too much problematic behaviour with each other. But I believe that we will find good solutions.”

The Asian Infrastructure Investment Bank is a multilateral development bank and international financial institution that aims to collectively improve economic and social outcomes in Asia. It is the world’s second largest multi-lateral development institution. 

Founded at the initiative of China, the AIIB has currently 110 members countries, most of them from Asia and Europe. 

Germany, France, Italy and the UK are members, but not the United States. Washington considers the bank to be too accommodating towards China.