Tough-talking U.S. faces tough G-20 talks
Trade a key issue at summit with maligned partners
FRANKFURT, Germany — President Donald Trump has vowed to get tough on trade partners like China, Mexico and Germany. Now his Treasury chief, Steven Mnuchin, will get his first opportunity to confront them all in one room.
The meeting of the most powerful economies’ finance ministers in Germany this week is likely to be dominated by talk about whether to commit to free trade, as previous meetings have — or implicitly accept that some countries may put up barriers, like tariffs, as Trump has promised.
The Group of 20 — 19 countries worth most of the global economy, plus the EU — are also due to discuss their long-standing ban on manipulating currencies to gain economic advantage. Weakening a currency can help a country’s exporters, but can also end up dumping its troubles with business costs and competitiveness on its trade partners.
The gathering Friday and Saturday in the southern German resort town of Baden-Baden will help set the tone for international commerce and finance and will give Mnuchin a chance to clarify what the U.S. position is.
The focus will be on the final statement issued jointly by the finance ministers Saturday.
Last year’s gathering of the Group of 20 finance ministers in Chengdu, China, issued a statement opposing “all forms of protectionism.” This time, such unequivocal language could be softened to refer to trade that is “open” and “fair,” without the absolute opposition to import restrictions to benefit domestic labor.
In a visit to Berlin ahead of the G-20 meeting, Mnuchin said the U.S. is interested in trade that is not only free but fair.
“Our objective is getting more balanced trade agreements,” he said, confirming that having border adjusted taxes is an option. He said, without providing specifics, that some U.S. trade agreements need to be reexamined, while adding that, “It is not our desire to get into trade wars.”
Mnuchin is expected to press his counterparts to live up to their commitments to refrain from purposefully weakening their currencies. During the campaign, Trump said he planned to name China a currency manipulator right after he took office. But since taking office, he has not discussed the topic.
Federal Reserve Chair Janet Yellen will join Mnuchin in representing the United States. Other prominent participants will be European Central Bank President Mario Draghi, China’s finance minister, Xiao Jie, and the host finance minister, Wolfgang Schaeuble of Germany.
The G-20 is due to also discuss ways to strengthen the global economy and create more jobs.
After meeting Thursday with Schaeuble, Mnuchin said the U.S. wants to still play an “essential leadership role” in the world economy.