White House says no
New rifts emerge with rejection of G-20 free-trade statement.
baden-baden, germany — The Trump administration on Saturday rejected a statement from other leading economies that warned against the perils of trade protectionism, the latest sign of how the administration’s more combative approach to diplomacy could create rifts with U.S. allies and leave traditional partners in the dark about the direction of U.S. policy.
Treasury Secretary Steven Mnuchin, appearing at a gathering of economic ministers and central bankers from the 20 largest economies, rebuffed multiple entreaties from German officials to include in the meeting’s joint statement language emphasizing the importance of free trade and that it should be conducted in a “rules based” manner, following existing standards and agreements.
By rejecting language that would have said the United States is opposed to protectionism, the White House sent a clear signal that it would not accept existing trade norms and could pursue a more antagonistic approach with trading partners around the world. Such language has been considered ordinary and noncontroversial in recent meetings of the Group of 20.
“I understand what the president’s desire is and his policies and I negotiated them from here, and we couldn’t be happier with the outcome,” Mnuchin said at a news conference Saturday.
Donald Trump made opposition to numerous trade deals a cornerstone of his presidential campaign and pulled the United States out of a broad Asia trade deal shortly after taking office, but has not yet followed up with other concrete steps to revamp the terms of America’s economic relationship with the world. He has threatened tariffs and other measures to correct what he says are other countries’ unfair advantages in their trade relationships with the United States, mostly taking aim at China and Mexico.
For many years, the United States has been the country rallying other nations to the cause of free trade and common language in the communiqués that follow meetings of economic ministers and central banks. Several European officials and one former U.S. official who had attended past G-20 meetings said it was the first time the United States had blocked such an effort.
The move follows new strains in the U.S. relationship with Britain and Germany, traditionally two of the country’s most steadfast allies.
The White House on Friday cited an uncorroborated Fox News report to accuse a British spy agency of surveilling Trump at the behest of the Obama administration — an accusation the agency said was baseless.
Then the president launched a pair of tweets Saturday morning accusing Germany of failing to fulfill its obligations after several negative headlines about his meeting Friday with German Chancellor Angela Merkel in Washington.
“Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel,” Trump said on Twitter. “Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”
(Germany does not owe vast sums of money to NATO, the defense alliance. Member nations are expected to spend 2 percent of their gross domestic product on defense spending, but Germany spends 1.2 percent. It’s unclear what Trump is referring to when he says the United States must be paid more for its defense of Germany.)
German economic officials spoke Saturday in Baden-Baden at about the same time Trump sent the accusatory tweets.
German Finance Minister Wolfgang Schäuble said the United States was at an “impasse” with others about what they should say on trade protectionism, so they decided to say nothing. He also accused the Trump administration of not having a firm view on what it was seeking in a trade policy.
“Obviously he had no mandate to talk about any definitions or interpretations of what the U.S. administration means by ‘fair trade,’ and that is something we have to accept for the time being,” Schäuble said.
Schäuble said that the finance ministers struggled to reach a consensus on how to approach trade.
“We have agreed on some wording and language on trade policy, which may be helpful or not,” he said at a news conference.
The Germans had tried to get Mnuchin on board. Sensing opposition to the initial language from the Trump administration, German officials had watered it down but Mnuchin resisted.
About 1 p.m. Saturday, Germany’s top central banker, Jens Weidmann, told his colleagues that the efforts to reach an agreement had failed.
Mnuchin then spoke up and asked whether they could agree on more generic language that said the countries wanted to “strengthen the contribution of trade.” Several other finance ministers balked, saying such language was meaningless.
Still, a version of Mnuchin’s proposal ended up in the final agreement, which contained just a brief generic reference: “We are working to strengthen the contribution of trade to our economies.”
The new language was markedly different from last year’s, when the finance ministers issued a joint statement that said, “We will resist all forms of protectionism.”
Joint statements issued after G-20 meetings are difficult to finalize and are only as meaningful as the countries want them to be. They aren’t formal treaties, but they do signal whether there is consensus.
The White House has said it thinks existing U.S. trade deals are unfair to American workers because the deals allow countries to lure away American jobs and send their goods to the United States at unfairly low prices. In addition to scrapping the Asian trade deal, Trump also has said he will renegotiate — or dump — the North American Free Trade Agreement.
Critics of this approach have said it could isolate the U.S. economy, make goods more expensive for Americans and hurt American exporters.
During a closed-door meeting Friday with other finance ministers and central bankers, Mnuchin repeatedly asserted that what’s good for America’s economy is good for global growth.
“My primary focus is on economic growth in the United States,” Mnuchin said after meeting with Schäuble in Berlin. “I think that economic growth in the United States is good for us and good for the other major economies in the world.”