G-20 ten­sions mount over U.S. trade pol­icy


HAM­BURG, Ger­many — Di­vi­sions be­tween world lead­ers over the di­rec­tion of global eco­nomic pol­icy were blown open again on Fri­day as a Group of 20 sum­mit quickly ran into head winds over free trade.

Gov­ern­ment of­fi­cials in Ham­burg are strug­gling to agree on a fi­nal state­ment that would bridge dif­fer­ences be­tween the U.S. and most

of the other G-20 coun­tries on trade, Ger­man Chan­cel­lor An­gela Merkel told re­porters. Work on lan­guage ac­cept­able to all on cli­mate was aban­doned by sub­or­di­nates, re­ferred to at the sum­mit as sher­pas, and left to lead­ers to hash out. On both is­sues, of­fi­cials pointed the fin­ger at U.S. re­cal­ci­trance.

“The sher­pas still have a big chunk of work ahead on the state­ment on trade,” Merkel told re­porters af­ter lead­ing the first ses­sion. “Th­ese dis­cus­sions are very dif­fi­cult — I don’t want to beat around the bush.”

Some of the clear­est di­vides had to do with cli­mate change af­ter Pres­i­dent Don­ald Trump’s de­ci­sion to pull the United States from the Paris cli­mate ac­cords. There

were also sharp warn­ings about U.S. steel pol­icy as Trump con­sid­ers re­stric­tions on im­ports.

The ten­sions were a mea­sure of Trump’s sharp break with pre­vi­ous U.S. poli­cies. They were also a warn­ing sig­nal of Wash­ing­ton’s di­min­ished clout, as the lead­ers of the other 19 na­tions gath­ered in Ham­burg con­sid­ered whether to sign state­ments that would ex­clude Trump or to find some sort of com­pro­mise. Two Euro­pean of­fi­cials said they were lean­ing to­ward a united front against Wash­ing­ton.

In a Twit­ter post Fri­day, Trump wrote of the G-20 that “I will rep­re­sent our coun­try well and fight for its in­ter­ests! Fake News Me­dia will never cover me ac­cu­rately but who cares!”

Af­ter the con­clu­sion of the first day of meet­ings, Trea­sury Sec­re­tary Steven Mnuchin said Trump’s in­ter­ac­tions with for­eign lead­ers were go­ing very well.

“We’ve had very pro­duc­tive eco­nomic meet­ings,” he told re­porters at the sum­mit. “There’s been very sub­stan­tive is­sues dis­cussed,” he said with­out go­ing into more de­tail.


Merkel is try­ing to find com­mon ground at one of the most highly an­tic­i­pated sum­mits in years as lead­ers strug­gle to ad­just to the era of Trump and his “Amer­ica First” cam­paign. The sum­mit of G-7 lead­ers in May ended with the U.S. iso­lated on cli­mate and trade, and Chi­nese Pres­i­dent Xi Jin­ping kicked off this meet­ing with a coded crit­i­cism of how cer­tain “de­vel­oped na­tions” have “sig­nif­i­cantly back­tracked” on is­sues such as trade and cli­mate change.

Talks ran aground as he­li­copter buzzed over the port city and po­lice sirens blared amid some­times vi­o­lent protests from anti-glob­al­iza­tion ac­tivists and anar­chist groups. The ne­go­ti­a­tions stum­bled even af­ter Merkel said most G-20 lead­ers are com­mit­ted to trade that’s “free” but also “fair trade.”

Ital­ian Prime Min­is­ter Paolo Gen­tiloni, who hosted the Group of 7 in Si­cily, said dis­cus­sion on bol­ster­ing growth with­out “de­fen­sive stands on pro­tec­tion­ism” re­mained open. The is­sue of cli­mate change is “nat­u­rally linked” to trade, with an “over­whelm­ing ma­jor­ity” of G-20 coun­tries sup­port­ing Paris cli­mate ac­cords, he said.

The ac­cords seek to limit the planet’s warm­ing to 2 de­grees Cel­sius — 3.6 de­grees Fahren­heit — above prein­dus­trial lev­els.

“We have to de­cide, ei­ther we go for free and fair trade, or each na­tion pro­tects its own gar­den,” he told re­porters.

Even Rus­sian Pres­i­dent Vladimir Putin, who met with Trump for the first time Fri­day, pushed the U.S. leader on trade, ac­cord­ing to Rus­sia’s econ­omy min­is­ter.

“Nine­teen coun­tries were speak­ing about free trade, and one coun­try was high­light­ing that this coun­try — United States — needs re­cip­ro­cal ap­proach to the trade,” Maxim Oreshkin said in an in­ter­view in English with Bloomberg Tele­vi­sion. “So that was kind of dis­so­nance be­tween the po­si­tion of United States and po­si­tion of all other coun­tries.”

Other coun­tries have also stood in op­po­si­tion to Trump’s drive to erect trade bar­ri­ers.

When there is pro­tec­tion­ism, “the en­tire in­ter­na­tional econ­omy shrinks,” Ja­panese For­eign Min­istry spokesman No­rio Maruyama told re­porters.

Ja­panese Prime Min­is­ter Shinzo Abe told lead­ers that all coun­tries in the global econ­omy must abide by “free and fair rules, and th­ese rules need to be main­tained at the high level, and need to be re­spected,” Maruyama said.

An­other EU leader, Euro­pean Coun­cil Pres­i­dent Don­ald Tusk, said he was heart­ened by Trump’s words of sup­port for Western or­ga­ni­za­tions such as NATO dur­ing a Thurs­day visit to Warsaw ahead of the G-20. But he was cau­tious about whether the Amer­i­can out­look had ac­tu­ally changed af­ter months of strain be­tween Wash­ing­ton and Europe.

“We have been wait­ing for a long time to hear th­ese words from Pres­i­dent Trump,” Tusk said. “But the real ques­tion is whether it was a one-time in­ci­dent or a new pol­icy. Pres­i­dent Trump said yes­ter­day in Warsaw that words are easy but it is ac­tions that mat­ter. And the first test will be our meet­ing here in Ham­burg.”


Trump could within days im­pose the re­stric­tions on steel, a move that would af­fect trade with more than a dozen ma­jor coun­tries.

“We will re­spond with coun­ter­mea­sures if need be, hop­ing that this is not ac­tu­ally nec­es­sary,” Euro­pean Com­mis­sion Pres­i­dent JeanClaude Juncker told re­porters, adding fig­u­ra­tively: “We are pre­pared to take up arms if need be.”

Juncker warned that Europe would re­spond in days, not months, if Trump an­nounces the re­stric­tions.

Com­merce Sec­re­tary Wil­bur Ross is near com­ple­tion of a mul­ti­month re­view of U.S. steel im­ports, and he has said that the large amount of steel im­ported by the United States puts na­tional se­cu­rity at risk be­cause it has weakened the do­mes­tic steel in­dus­try. The White House is con­sid­er­ing us­ing this ra­tio­nale to im­pose new re­stric­tions, ei­ther by im­pos­ing tar­iffs or quo­tas, or a com­bi­na­tion of the two.

Ahead of the sum­mit, the White House was close to mak­ing a de­ci­sion, but top Trump ad­min­is­tra­tion ad­vis­ers slowed the process down at the last minute, per­suad­ing Trump to meet with other world lead­ers at the G-20 be­fore de­cid­ing how to pro­ceed.

The Trump ad­min­is­tra­tion has blamed China for what it says is a “global over­ca­pac­ity” of steel, es­sen­tially ar­gu­ing that the Chi­nese gov­ern­ment is sub­si­diz­ing the steel in­dus­try and al­low­ing its pro­duc­ers to cre­ate and ex­port so much steel that it drives down prices and makes it dif­fi­cult for U.S. pro­duc­ers to com­pete.

But any U.S. re­stric­tion on steel im­ports would have a rel­a­tively muted ef­fect on China, and would hit other coun­tries much harder.

The largest ex­porters of steel to the United States are Canada, Brazil, South Korea, Mex­ico and Turkey, ac­cord­ing to IHS Global Trade At­las. Ger­many also has a large steel in­dus­try, and Ger­man of­fi­cials have been par­tic­u­larly con­cerned about what a uni­lat­eral move to im­pose re­stric­tions on steel im­ports to the United States might mean.

Trump and Merkel spoke about trade and steel a few days ago, a re­flec­tion of how se­ri­ously both sides con­sider any new ac­tion on the is­sue.

U.S. ne­go­tia­tors were press­ing their in­ter­na­tional coun­ter­parts on what they de­scribed as a global glut of steel pro­duc­tion in the hopes they can reach an agree­ment by to­day on how to curb it, a U.S. of­fi­cial said. The of­fi­cial said the is­sue was con­sum­ing sig­nif­i­cant time.


Ger­man Chan­cel­lor An­gela Merkel (left) talks Fri­day with French Pres­i­dent Em­manuel Macron be­fore the first work­ing ses­sion on the first day of the Group of 20 sum­mit in Ham­burg, Ger­many.

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