US Treasury Secretary Janet Yellen stressed the need for the G7 countries to “go big” with fiscal stimulus to support economic recovery from the global pandemic.
In her first call with foreign counterparts and central bankers from the G7, Yellen said that “the time to go big is now” and that the group should focus on how to help the economy, the US Treasury Department said in a statement after the virtual meeting held on Friday.
The online gathering of finance chiefs from the world’s top industrial economies addressed a proposed expansion in the IMF’s lending firepower along with digital taxation and climate change.
Photo: AP
The US is leaning toward backing an increase in the IMF’s special drawing rights, or SDRs, by as much as US$500 billion, Bloomberg News reported earlier this month. The fund has been lobbying for more help to support developing nations against the COVID-19 crisis.
The G7 discussed increasing the IMF’s resources during Friday’s call, and the group expects a decision to be announced later this month on the back of a G20 discussion, according to one person familiar with the matter. The finance ministers’ goal in Friday’s talks was to build momentum around helping developing nations, the person said on the condition of anonymity.
UK Chancellor of the Exchequer Rishi Sunak, who hosted the virtual meeting, also stressed the importance of the G7 “shaping support for vulnerable countries,” according to a statement from his office.
The US has a de facto veto in the IMF on the decision, and former US Treasury secretary Steven Mnuchin had previously blocked the fund’s requests to boost its special drawing rights.
Yellen highlighted in the call that there is a new tone out of Washington. The US “places a high priority on deepening our international engagement and strengthening our alliances,” she said, according to the Treasury’s statement.
On fiscal policy, the US is among the most aggressive, with the Biden administration pursuing a US$1.9 trillion package in Congress. French Finance Minister Bruno Le Maire said the world’s biggest economies must coordinate stimulus plans and policies in an effort to reduce key risks including trade tensions and inequality.
The finance chiefs also discussed the continuing effort to find international consensus on taxing Internet giants such as Facebook Inc.
Japanese Finance Minister Taro Aso told reporters that given how Friday’s talks went there’s an increasing possibility of a compromise on the international taxation issue. US and European officials have shifted their positions in recent months, he said. Aso said he previously thought that getting a conclusion by mid-2021 was almost impossible.
The group will hold another meeting next month, Aso said.
Biden “believes the largest corporations should pay their fair share in taxes,” White House Press Secretary Jen Psaki said on Friday at a briefing. She said Biden is “committed” to reaching a multilateral agreement.
The UK underlined its commitment to progress on the tax challenges of the digital economy, and called on the G7 to work toward reaching an enduring multilateral solution by the deadline of the middle of this year agreed by the G20, the UK Treasury said.
Talks on digital taxation have been held under the rubric of the Paris-based Organisation for Economic Co-operation and Development.
“We have to come to an agreement this summer,” on the matter, Le Maire said, according to the French finance ministry.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
RSS