Trade tensions overshadow G20 meet
20 March, 2018, 12:00 am
Buenos Aires – Worries about the potential for a US-China trade war and frustration over US President Donald Trump’s steel and aluminum 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 Mr 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 aluminum 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,” Mr Truman said.
“Mnuchin is going to be playing defense in his comments and he’ll put the best face on it that he can,” Mr Truman added.
The US import tariffs of 25 per cent on steel and 10 per cent on aluminum, set to become effective on March 23, have raised alarms among trading partners that Mr Trump is following through on his threats to dismantle the decades-old trading system based around World Trade Organization rules in favor of unilateral US actions.
Potentially broader anti-China tariffs and investment restrictions under consideration as part of a US intellectual property probe have raised concerns that retaliation could seriously diminish global trade and choke off the strongest global growth since the G20 was formed during the 2008 financial crisis.
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.”