Last week, US Treasury Secretary Scott Bessent affirmed the Trump administration’s ongoing commitment to the IMF and World Bank, sending a wave of relief through the crowd of international policymakers gathered in DC for Spring Meetings. Reading between the lines, Bessent’s speech indicated that Treasury experts will influence US policy toward these institutions, keeping them at arm’s-length from the chaos of the broader foreign assistance review. At least for now, it seems the IMF and World Bank will not suffer the most extreme impulses of the Trump administration inspired by Project 2025.
Bessent’s support for the international financial institutions was not unconditional though. He said that “mission creep has knocked these institutions off course,” laying an ultimatum that the administration will work with them “so long as they can stay true to their missions.”
What does this mean for the IMF?
Bessent’s overarching directive was for the IMF to refocus on global monetary cooperation and financial stability. This means moving away from what Bessent says are non-core: social issues, gender, and the big one—climate. He gave three examples of this refocus:
Surveillance: The IMF needs to restore its role as an even-handed, “brutal” truth-teller by consistently calling out distortive currency and trade practices.
Not surprisingly, Bessent wants the IMF to focus on external surplus countries, name-checking China for distortive trade policies and excess capacity, and Europe’s need to stimulate domestic demand. IMF watchers should pay close attention to annual surveillance reviews for China and the big European economies, as well as the External Sector Report, all due this summer. The 2026 Comprehensive Surveillance Review will be an opportunity to make real systemic changes.
Lending: The IMF should focus its lending on temporary balance of payments problems—presumably rather than fiscal support—paired with deeper reforms.
Bessent pressed IMF management and shareholders to be “willing to walk away from countries that are not willing to make needed reforms.” Just looking at some of the large repeat program countries (e.g., Egypt, Jordan, and Pakistan) makes clear that this is a significant problem that requires new thinking and close attention.
Debt Sustainability: The IMF (and the World Bank) should more forcefully call out unsustainable lending practices and push official bilateral lenders to engage early with borrower countries to minimize periods of debt distress.
Debt will be a theme for the Trump administration driven by their desire to make it a China issue—even at the expense of capturing the broader nuance of the problem. For example, Bessent’s call to action on debt notably did not extend to engagement with bondholders, nor did he link debt sustainability with better IMF program design that calls for deeper restructuring and investment. Some welcome progress was made on debt during Spring Meetings, including wider recognition an impending debt-linked development crisis and important technical work by the Global Sovereign Debt Roundtable. Still, more ambition and urgency are needed to address debt overhang in many countries. Look to the IMF’s review of its Low-Income Country Debt Sustainability Framework next year and the US 2026 G20 presidency as potential channels for action.
These are hardly new themes from US Treasury officials. In a September 2023 speech, Biden administration Under Secretary Jay Shambaugh said: “we cannot let the temptation to address every problem pull the IMF away from its core mission of macroeconomic and exchange rate surveillance and guidance.” Shambaugh went on to call on the IMF to strengthen external sector surveillance, citing China’s excess capacity; increase reform commitments in lending programs; and improve debt sustainability practices.
While these messages are familiar, there are key questions on how Bessent’s IMF views will manifest in the broader Trump context—and how IMF management and other shareholders will respond.
First, will the Trump administration include the IMF quota increase negotiated by the Biden administration in the FY26 President’s Budget request? At least publicly, Bessent was silent on last year’s agreement among shareholders to increase the IMF’s main source of financing while preserving current shareholding allocations. This deal was a major win for the US—the Trump administration can lock in US shareholding and demonstrate Bessent’s purported commitment to the IMF by securing the appropriation and authorization needed to enact the agreed quota increase.
Second, what does Bessent’s refocus mean for the IMF’s engagement in climate policy? One can imagine that the US push will translate into a pragmatic messaging shift paired with a tighter focus on macro-critical climate policies. After all, the IMF’s most important contribution to climate policy is not what it says, but its support for countries enacting sound policies to incentivize investment. IMF surveillance, capacity development, and program design would still address the very real macroeconomic and financial implications of climate change and energy transitions in line with country demand—but IMF management wouldn’t spend as much airtime emphasizing climate work. IMF Managing Director Kristalina Georgieva seemed to test this approach with her Spring Meetings curtain-raiser speech, not using the word “climate” once and instead focusing on imbalances, debt, and reforms. But it is yet to be seen if the US has something deeper in mind, such as reforms to the Resilience and Sustainability Trust or personnel changes. It’s also far from clear that other shareholders will accept even a purely rhetorical cutback.
Finally, how will the IMF tackle harmful US economic policies? With its disorderly tariffs and cuts to foreign assistance, the Trump administration has shown a disregard for the economic prospects of other countries, including the most vulnerable. US fiscal policy is a major culprit of external imbalances, though the Trump administration has not presented a credible plan to tackle the deficit. Overall, it’s unclear how the IMF will square these realities with Bessent’s demand that they be an even-handed truth-teller—and whether the Trump administration will accept its share of the brutal truth.
