US pushes for EU concessions amid trade stalemate at G20 finance summit

The United States and its European Union allies are at a trade stalemate after Treasury Secretary Steven Mnuchin refuses to budge amid fears of an escalating global trade conflict.

In his opening salvo at the Group of 20 summit in Buenos Aires, Mnuchin urged China and the EU to respect “free, fair and reciprocal trade” amid talk of an escalating global trade conflict, but his French counterpart fired back that the US must “return to reason.”

International Monetary Fund chief Christine Lagarde opened the summit by reiterating her fears that increasing trade restrictions would hurt global GDP.

Lagarde said that taking into account “current announced and in process measures,” an IMF simulation indicates that in a worst-case scenario, a half point would be cut from global GDP, amounting to some $430 billion.

But Mnuchin showed no signs of a US willingness to back down.

Mnuchin was inflexible in his approach to the EU following a series of tit-for-tat measures that began with US President Donald Trump’s decision to slap tariffs on steel and aluminum imports.

“My message is pretty clear. It’s the same message the president delivered at the G7: If Europe believes in free trade, we’re ready to sign a free trade agreement with no tariffs, no non-tariff barriers and no subsidies. It has to be all three,” said Mnuchin.

That brought a firm response from French finance and economy minister Bruno Le Maire at the G20 meeting, which brings together finance ministers and central bank governors from the world’s 20 leading economies.

“We refuse to negotiate with a gun to the head,” he said. “It must be the US that takes the first step to de-escalate.”

He said he expected “a change of attitude” from Trump. Otherwise “there will be no choice other than to retaliate.”