(Bloomberg) -- The G-7 summit was a horror-show for globalists. The same week, there was some brighter news.

Before President Donald Trump headed to Quebec to upend ties with some of America’s closest allies, his administration endorsed a $50 billion International Monetary Fund loan for Argentina, the biggest in the IMF’s history. Treasury Secretary Steven Mnuchin welcomed the deal, saying he supports Argentina’s vision for transforming its economy.

The U.S. also backed a $13 billion capital increase for the World Bank in April. Trump may have fulminated against the global economic order, and Mnuchin has said the IMF must do more to fix trade imbalances, but there’s a sense that the two Washington-based institutions have escaped the expected wrath of the president. So far.

‘It’s been relatively quiet” on the IMF front, said Thomas Bernes, a distinguished fellow at the Centre for International Governance Innovation in Waterloo, Ontario, and a former Fund executive director. “That’s been a pleasant surprise.”

Reliable Ally

There are reasons to doubt that the calm will last.

Bailing out Argentina was a relatively easy call. President Mauricio Macri’s government took over after more than a decade of leftist rule. IMF officials have endorsed his market-friendly policies. The White House sees him as a reliable ally in Latin America, where hostility to Washington runs deep.

The $50 billion deal sailed through after just a month’s talks. (It still needs formal endorsement by the IMF’s executive board).Not every would-be borrower will tick all those boxes.

Major loan programs to Greece and Ukraine are still the subject of argument. If more checks need to be written, the Trump administration may prove more reluctant than its predecessor.

And there are signs of fresh trouble brewing across developing economies. Turkey, Brazil and South Africa have seen runs on their currencies in recent weeks, as a stronger dollar and rising interest rates shift the investment climate.

“We’re heading for a rockier patch in the global economy,” said Bernes. “The Fund’s going to be called upon to do more.” And when it comes to emerging markets, he said, “the U.S. is a bit of a black box. We frankly don’t know what the administration will think.”

China’s Share

It’s clear what some Trump aides think of the IMF and World Bank. John Bolton, the national security adviser, wrote an article quoting a call for the Fund to be abolished, and has suggested privatizing the Bank.

David Malpass, the Treasury’s undersecretary for international affairs, has criticized the World Bank for lending too much to China. That question could be revived in Congress, which still has to approve the Bank’s capital increase. The administration opposed it initially, before endorsing a compromise that will see China get less financing but a bigger shareholding.

Reading between the lines, it’s also fairly clear what the IMF thinks of Trumponomics.

The Fund’s constitution requires it to support the “balanced growth” of global trade. In Quebec, that would have placed it on the side of the G-6, not Trump’s G-1, as the U.S. president lurched between backing abolition of all tariffs and threatening to shut other countries out of U.S. markets.

America’s economy “is delivering better living standards for only the few,” the IMF said in its annual country report last year. Since then, the administration has passed tax cuts skewed toward the rich, after sparring with the Fund over fiscal policy. This year’s IMF report on the U.S. economy is due out on Thursday.

But none of these disagreements has escalated.

“We continue to work very well with our key counterparts in the Treasury and other parts of the administration on a range of topics,” including exchange rates and money-laundering, IMF spokesman Gerry Rice said by email.

‘A Bit Deaf’

Past administrations have found the IMF and World Bank invaluable as financial firefighters -- especially when the alternative has been direct commitment of American money.

Trump may reach the same conclusion, said Douglas Rediker, a senior fellow at the Brookings Institution and former U.S. executive director at the Fund. When a crisis blows up and looks like spreading, “suddenly the IMF becomes an enormously appealing tool,” he said.

Meanwhile, diplomacy by IMF Managing Director Christine Lagarde and World Bank president Jim Yong Kim has kept channels open.

Kim rolled out a fund for women entrepreneurs championed by the president’s daughter, Ivanka Trump. Lagarde has worked to build a rapport with Mnuchin.

This week, the IMF chief was asked about America’s protectionist turn. She replied by citing some advice on the secret of a long marriage: “It helps being a little bit deaf on occasions.”

To contact the reporter on this story: Andrew Mayeda in Washington at amayeda@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Ben Holland, Sarah McGregor

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