An economist who had publicly criticized U.S. President Donald Trump's tariff policy was effectively tapped to become the International Monetary Fund (IMF) chief economist but was dropped at the last minute, according to reports. With the United States the IMF's largest shareholder, word that an economist critical of the Trump administration's economic policy influenced the selection process is fueling controversy over the fairness of the appointment.
On the 10th, the Financial Times (FT), citing people familiar with the selection, reported that the IMF had chosen Ricardo Reis of the London School of Economics (LSE) as the new chief economist and was preparing to announce the appointment, but reversed the decision at the last minute.
The IMF chief economist leads a department of more than 100 economists and is involved in setting the IMF's main policy agenda. The formal title is economic counselor and director of the research department.
Initially, the IMF was preparing to announce the appointment of Reis to the post this summer. But after remarks surfaced in which Reis had criticized President Trump's tariff policy in the past, the fund changed course at the last minute, three people familiar with the matter told the FT.
Reis is an economist who has actively shared views on economic issues in Portugal and international media. In April last year, after President Trump released the so-called "Liberation Day" tariffs, he warned on the social media platform X (formerly Twitter) that the tariff burden would fall on U.S. consumers and spark new inflation. A month later in May, on a podcast by the Portuguese think tank Fundação Francisco Manuel dos Santos, Reis said, "Because of tariffs, U.S. prices will rise," adding, "Tariffs will immediately push up the prices of imports and make production in the United States harder, more expensive, and more inefficient."
The IMF appointed Silvana Tenreyro of the LSE, a former member of the Bank of England (BOE) Monetary Policy Committee, as chief economist. Tenreyro began work on the 10th of last month. She has also expressed the view that tariffs would negatively affect economic growth, but the FT said her public criticism was less forceful than Reis's.
Senior IMF appointments are decided by IMF Managing Director Kristalina Georgieva. Still, as the IMF's largest shareholder, the United States can exert strong, if informal, influence over appointments and policy, the FT said. According to the IMF, the United States holds 16.49% of total voting power, the largest among member countries. That is more than double Japan's 6.14% in second place and China's 6.08% in third. The United States also has the largest IMF quota share at 17.42% of the total.
In particular, when Reis's appointment fell through at the last minute, some people familiar with the selection process voiced concern that an economist linked to the Trump administration might be named chief economist. Those concerns eased somewhat after Tenreyro was ultimately appointed, the FT reported.
The IMF declined to discuss specifics of the selection process. An IMF Spokesperson told the FT, "As a matter of practice, we do not disclose the identities of other candidates or specific details of the selection process," adding, "The selection of the chief economist followed a rigorous competitive procedure." Reis declined to answer the FT's questions on the matter.
The FT noted that the episode underscores broader concerns about how the Trump administration treats economists and academia who have criticized its trade policy. It has effectively stoked debate that academic views and public remarks on economic policy can work to a candidate's disadvantage in appointments to senior posts at international organizations.
In fact, last year Trump publicly urged David Solomon, the chief executive officer (CEO) of Goldman Sachs, to fire Jan Hatzius, the firm's chief economist, after Hatzius analyzed that tariffs would hurt the U.S. economy. This year, Kevin Hassett, Trump's economic adviser, argued that Federal Reserve Bank of New York economists who issued a report finding that U.S. companies and consumers bear most of the cost of tariffs "should be disciplined," though he later partially walked back the remark.