U.S. trade tariffs set to leave Mnuchin in cold at G20 meeting
By David Lawder and Luc Cohen
WASHINGTON/BUENOS AIRES, July 19 (Reuters) - The financial
leaders of the world's 20 biggest economies meet in Buenos Aires
this weekend for the first time since long-simmering trade
tensions burst into the open when China and the United States
put tariffs on $34 billion of each other's goods.
The United States will seek to convince Japan and the
European Union to join it in a more aggressive stance against
Chinese trade practices at the G20 meeting of finance ministers
and central bank presidents, according to a senior U.S. Treasury
Department official, who spoke on condition on anonymity.
But those efforts will be complicated by frustration over
U.S. steel and aluminum import tariffs on the EU and Canada.
Both responded with retaliatory tariffs in an escalating trade
conflict that has shaken markets and threatens global growth.
"U.S. trading partners are unlikely to be in a conciliatory
mood," said Eswar Prasad, international trade professor at
Cornell University and former head of the International Monetary
Fund's China Division.
"(U.S.) hostile actions against long-standing trading
partners and allies has weakened its economic and geopolitical
At the close of the last G20 meeting in Argentina in March,
the financial leaders representing 75 percent of world trade and
85 percent of gross domestic product released a joint statement
that rejected protectionism and urged "further dialogue," to
little concrete effect.
Since then, the United States and China have slapped tariffs
on $34 billion of each other's imports and U.S. President Donald
Trump has threatened further tariffs on $200 billion in Chinese
goods unless Beijing agrees to change its intellectual property
practices and high-technology industrial subsidy plans.
Trump has said the U.S. tariffs aim to close the $335
billion annual U.S. trade deficit with China.
U.S. Treasury Minister Steven Mnuchin has no plans for a
bilateral meeting with his Chinese counterpart in Buenos Aires,
a U.S official said this week.
Rising trade tensions have led to concerns within the
Japanese government over currency volatility, said a senior
Japanese G20 official, who declined to be named. Such volatility
could prompt an appreciation in the safe-haven yen and threaten
Trump's metals tariffs prompted trade partners to retaliate
with their own tariffs on U.S. goods ranging from whiskey to
motorcycles. The United States has said it will challenge those
tariffs at the World Trade Organization.
The EU finance ministers signed a joint text last week that
will form their mandate for this weekend's meeting, criticizing
"unilateral" U.S. trade actions, Reuters reported. The ministers
will stress that trade restrictions "hurt everyone," a German
In a briefing note prepared for the G20 participants, the
International Monetary Fund said if all of Trump's threatened
tariffs — and equal retaliation — went into effect, the global
economy could lose up to 0.5 percent of GDP, or $430 billion, by
Global growth also may have peaked at 3.9 percent for 2018
and 2019, and downside risks have risen due to the tariff spat,
the IMF said.
"While all countries will ultimately be worse off in a trade
conflict, the U.S. economy is especially vulnerable," IMF
Managing Director Christine Lagarde wrote in a blog post.
"Policymakers can use this G20 meeting to move past
self-defeating tit-for-tat tariffs."
Trade is not on host country Argentina's published agenda
for the July 21-22 ministerial, which focuses on the "future of
work" and infrastructure finance. But it will likely be
discussed during a slot devoted to risks facing the global
economy, much as in March, according to an Argentine official
involved in G20 preparations, who asked not be named.
(Reporting by David Lawder and Luc Cohen
Additional reporting by Tetsushi Kajimoto in Tokyo
Editing by Daniel Flynn and Rosalba O'Brien)
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