China, US flex muscles at G20 meeting as trade war looms

Tensions over trade surfaced on the first day of a G20 meeting of finance ministers on Monday as the United States and China – whose differences are fuelling fears of a trade war – flexed their muscles in the Argentine capital.

The meeting of the world’s leading economies in Buenos Aires comes days before US tariffs on steel and aluminium are due to come into force on Friday for all countries except Canada and Mexico.

The main focus of the talks is the threat of a trade war between the US and its trading partners, particularly China and the European Union.

And, as with every G20 meeting since US President Donald Trump’s arrival at the White House, the drafting of the meeting’s final statement has revealed differences between the world’s two biggest economies.

“China and the United States are each flexing their muscles during the negotiations on the final text of the communique,” which will be released at the end of the meeting on Tuesday, a source close to the talks said. “The communique is likely to show that there are tensions over trade. The text won’t look to hide these tension, but it should however underline that a collective solution remains the best option.”

The US tariffs are essentially aimed at China, whose steel-producing overcapacity has hampered US producers for years, but Washington’s European allies have also come under fire from Trump, who has particularly targeted German trade surpluses.