Logo of Phnom Penh Post newspaper Phnom Penh Post - Leaders of G20 urge dialogue over mounting trade tensions

Leaders of G20 urge dialogue over mounting trade tensions

Content image - Phnom Penh Post
Argentina’s President Mauricio Macri (third left), Economy Minister Nicolas Dujovne (second left) and Central Bank President Luis Caputo (fourth left) hold a meeting with US Secretary of the Treasury Steven Mnuchin (second right) and US Chairman of the Federal Reserve Jerome Powell (right) in Buenos Aires on Sunday. PRESIDENCIA ARGENTINA/afp

Leaders of G20 urge dialogue over mounting trade tensions

Group of 20 members pleaded on Sunday for increased dialogue to defuse escalating trade tensions that could hit global economic growth hard.

Finance ministers and central bankers from 20 leading economies closed a two-day meeting in Buenos Aires warning that “heightened trade and geopolitical tensions” threaten the economic expansion.

It comes at a time when US President Donald Trump’s protectionist policies have provoked ire from traditional allies such as the European Union, Canada and Mexico, and sparked a series of retaliatory measures.

The G20’s final communique stressed “the need to step up dialogue and actions to mitigate risks and enhance confidence” amidst fears of an escalating global trade war.

While the statement did not mention the United States, which is at the center of trade disputes with G20 members China, the EU and others, it demonstrated more concern than in March, when the group avoided the issue altogether.

Argentina’s Economy Minister Nicolas Dujovne hinted that the G20 could not afford a rupture over trade disputes, which he said should be resolved directly between governments or through the World Trade Organization.

“It’s not about denying differences,” Dujovne told reporters at the conclusion of the meeting. But “we have to try to emphasise consensus because we recognise the importance of keeping this group alive and in harmony”.

During the 2008 global financial crisis the G20 was critical in preventing an even worse outcome and saved millions of jobs, he said, noting that “it’s in the bad times when you see how essential it is.”

But Treasury Secretary Steven Mnuchin reiterated his claim that the US merely wants “more balanced trade” with other countries.

Cool heads needed

Mnuchin also dismissed the economic impact of the raft of tariff hikes and retaliatory duties, saying so far they have only affected the US on a “micro” scale. But from a “macro standpoint we do not yet see any significant pattern on the economy”.

US businesses have been hit with a series of punitive measures by China, the EU, Canada and Mexico, including tariffs on soybean, motorcycles, bourbon and other goods, while manufacturers are complaining about rising prices of key supplies subject to new US duties.

EU finance chief Pierre Moscovici hit out at Trump’s protectionist policies, but said cool heads are needed to resolve the dispute.

The US and EU have been at loggerheads since Trump angered European allies by imposing tariffs on steel and aluminum. He also has threatened to hit auto imports with duties which would be especially hard for Germany.

While the EU is “willing to build bridges”, Moscovici told reporters “we believe targeting us is certainly inappropriate . . . and that we must act with the US as allies – not foes but allies”.

Mnuchin insisted the US wants to “resolve the trade issues with the EU” and the complaint often is more about “non-tariff barriers” than tariffs.

“We have a trade imbalance with many countries as a result of not exactly free and fair trade,” he said.

Earlier in the meeting he said the dispute with the EU could be resolved by agreeing to trade with no tariffs, no barriers and no subsidies.

Moscovici warned that “further trade escalation conflicts would negatively affect” all the countries involved, the US included. Protectionism benefits no one, he said, and creates “no winners, only casualties”.

The head of the International Monetary Fund Christine Lagarde agreed, and again spoke out against the tit-for-tat tariffs and urged that “trade conflicts be resolved via international cooperation without resort to exceptional measures.”

The IMF warned recently that in a worst-case scenario, $430 billion of global GDP – or a half percentage point – could be lost in 2020 if all tariff threats and retaliations are carried out.

As well as imposing tariffs of 25 percent on steel and 10 percent on aluminum, Trump hit China with a 25 percent punitive levy on $34 billion of goods, with tariffs on the way on an additional $16 billion, and $200 billion more under consideration.

And in a television interview aired last week, Trump threatened to impose duties on the entire $500 billion of goods the US imports from China.

The US has long complained that China steals US technology through forced transfers or outright theft, and the issue is at the heart of Trump’s trade offensive.

Mnuchin said: “We want to have the right to protect our IP and our technology, anywhere in the world – that’s not just China specific.”

MOST VIEWED

  • Hun Sen says Kingdom not a 'satellite country'

    Prime Minister Hun Sen said Cambodia had sent diplomatic notes to various embassies demonstrating its stance and clarifying allegations that the Kingdom is a satellite country of China which will allow it exclusive access to the Ream Naval Base in Preah Sihanouk province. The response

  • Vast Prince Manor fun park opens to much fanfare in Kandal

    Chinese-owned Prince Culture and Development Co Ltd officially launched the $85 million Prince Manor entertainment centre in Kandal province on Wednesday. Prince Manor is located along National Road 1, 20km from the centre of Phnom Penh. It is the first major theme park project in Cambodia and

  • Angkor provides ‘valuable’ water storage

    The Apsara National Authority (ANA) has stored millions of cubic metres of water at reservoirs in the Angkor area after Cambodia experienced a series of rainstorms over the last few days. The storing of the water, besides serving temple conservation, will also be used to

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial