US tariffs, China trade tensions cloud G20 meet
BUENOSAIRES: SEVERAL G20 OFFICIALS SAID THEY WILL INSIST ON MAINTAINING THE G20 COMMUNIQUE LANGUAGE
Worries about the potential for a US-China trade war and frustration over US President Donald Trump’s steel and aluminium tariffs threatened to dominate a gathering of finance leaders this week amid strengthening growth.
US treasury secretary Steven Mnuchin, who arrives on Sunday in Buenos Aires ahead of a two-day meeting of the Group of 20 finance ministers, will be in a position of defending Trump’s trade plans against widespread criticism from G20 partners.
At the same time, he is likely to hear pleas for exemptions from the steel and aluminium tariffs, said Edwin Truman, a former Treasury and Federal Reserve international policy official now with the Peterson Institute for International Economics in Washington.
“He’s going to get an earful from them,” Truman said. “Mnuchin is going to be playing defense in his comments and he’ll put the best face on it that he can,” Truman added.
The US import tariffs of 25% on steel and 10% on aluminium, set to become effective on March 23, have raised alarms among trading partners that Trump is following through on his threats to dismantle the decades-old trading system based around World Trade Organisation rules in favor of unilateral US actions.
Potentially broader antiChina tariffs and investment restrictions under consideration as part of a US intellectual property probe have raised concerns that retaliation could seri- ously diminish global trade and choke off the strongest global growth since the G20 was formed during the 2008 financial crisis.
Reuters reported last week that the Trump administration was considering punitive tariffs on some $60 billion worth of Chinese information technology, telecoms and consumer products annually.
Several G20 officials, including the finance ministers from host country Argentina and Germany, said they will insist on maintaining G20 communique language emphasising “the crucial role of the rules-based international trading system.”
An early draft of the G20 communique seen by Reuters contained that phrase and added: “We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements.”
But it was unclear whether that language will stand. Mnuchin a year ago at his first G20 meeting in Germany pressed the group to drop a decades-old pledge “to resist all forms of protectionism.” This was replaced with a watered-down pledge to “strengthen the contribution of trade to our economies.”