Global finance chiefs were unusually blunt in warning that the U.S. had put the international trade order at risk as President Donald Trump pushes ahead with his “America First” agenda by imposing steep tariffs on steel and aluminum.
Finance ministers and central bankers from the Group of 20 nations told U.S. Treasury Secretary Steven Mnuchin on Monday that multilateral, rule-based trade is an essential pillar of the global economy, according to three people familiar with the discussions. But U.S. officials are standing firm and telling counterparts gathered in Argentina that they won’t give up their economic and national security interests, according to a Treasury official.
“The trip to the G-20 will focus on advancing the Trump administration’s global economic agenda to level the playing field for U.S. companies and workers,” Mnuchin said in a emailed statement on Monday.
Trade has taken center stage in the debate after Trump slapped import tariffs on aluminum and steel, with an informal poll of delegates singling out protectionism as the biggest threat to global growth. A euro-area official identified protectionism as one of the four medium-term risks to the world economy, listing financial deregulation, a sharp repricing of financial assets and procyclical fiscal policies as the other threats.
Mnuchin didn’t address trade or the proposed tariffs during Monday’s discussion, according to two sources familiar with the talks.
“The G-20 will continue to emphasize the importance of free trade,” Bank of Japan Governor Haruhiko Kuroda said on Monday. “Trade policies and trends affect the global economy, and I’d like to pay close attention to them.”
The Brazilian and Japanese delegations were among those questioning the U.S., and were joined by officials from other countries including Germany, South Korea, Italy, France and Saudi Arabia, the sources said.
G-20 delegates from Europe were particularly vocal heading into the two-day gathering in Buenos Aires, and appealed to their U.S. counterparts that a collapse of the world’s multilateral trade system must be averted at all cost.
“Protectionist measures would increase uncertainty” and risk delivering a blow to the euro area’s synchronized economic expansion, French central bank chief Francois Villeroy de Galhau said in a speech on Sunday. His Dutch colleague Klaas Knot identified “some medium-term clouds” relating to trade on the horizon of an otherwise favorable growth outlook.
Officials have torn up parts of the first draft of the group’s communique, which repeated pledges for countries to refrain from unfair trade practices and included a warning that the global economic expansion would be thrown into jeopardy if governments turn inward. On Monday, delegates stripped references to risks from inward-looking policies, which some saw as a veiled reference to U.S. protectionism.
Delegates are having trouble finalizing the communique, as nations push back against U.S. requests to delete the term “multilateral” from the statement, Pierre Moscovici, European commissioner for economic and financial affairs, said in an interview. “Avoiding multilateralism in a multilateral organization makes no sense,” he said.
Argentina and South Korea have asked for concessions before tariffs take effect on Friday, while Canada and Mexico are shielded due to negotiations to revamp the North American Free Trade Agreement. The top U.S. trade negotiator has been leading discussions to exempt countries from the tariffs if they meet certain criteria, including joining the U.S. in pushing back against Chinese trade policies, according to a European official.
“Protectionist measures haven’t had positive results in the long run,” Brazil’s Finance Minister Henrique Meirelles said on Monday. “These type of measures are negative for everybody.”
— With assistance by Yoshiaki Nohara, and Michael McKee