IMF: Finance Minister Heinen calls on sanctions against authoritarian regimes

As an open economy, the Netherlands is against trade barriers, but not in all cases. Finance Minister Eelco Heinen argued at the annual meeting of the International Monetary Fund (IMF) that a strict distinction must be made between economically motivated import duties on the one hand and sanctions on regimes on the other.

"The Russian aggression in Ukraine is unacceptable. And the argument: yes, but that damages our trade relations does not fit in with that," Heinen stated at a press conference around the meeting in Washington. According to him, that situation justifies imposing sanctions. "I am also not going to advocate free trade with Iran. That is a disgraceful regime. It has to be countered with sanctions."

The ongoing fragmentation of the world stage is an important issue at the IMF. According to the Fund, this is the wrong approach because imposing import tariffs, for example, only risks getting bogged down in a process of action and reaction that no one can get out of.

Heinen says he agrees with that argument, but he says he was the only reprentative of an European country at the meeting to make an important comment. "You have to make a very clear distinction between security policy and economic policy. What threatens to happen is that they become intertwined. And what I was advocating, with support from the Americans and Canadians, is that we continue to make that distinction very clearly."

When it comes to technology from companies like ASML, Heinen says we should also "not be naive". "There are definitely security risks involved. The Americans point that out all the time. It's all fun, but those complicated chips can also be used militarily."

The US presidential elections are coming up soon. Donald Trump has announced that he wants to significantly increase import duties on Chinese products. Heinen does not want to comment on a possible election outcome. "Whichever government is in power, we will continue to work well with our American allies."

In general, he does add that history shows that imposing import duties is unwise. "Then people find out: wait a minute, a part of the product that I might put a trade tariff on might use semi-finished products that are made in my country. So indirectly you are also damaging your own industry."