US’ Steven Mnuchin ‘available for talks’ but G20 summit brings no dialogue with China and no global consensus on ending trade war

Treasury Secretary shares only ‘chit-chat’ with China’s finance minister Liu Kun, as finance ministers warn tensions are jeopardising growth

PUBLISHED : Monday, 23 July, 2018, 3:09pm
UPDATED : Friday, 26 October, 2018, 3:57pm

Global finance leaders called for stepped-up dialogue to prevent trade and geopolitical tensions from hurting growth, but ended a two-day G20 meeting with little consensus on how to resolve multiple disputes over US tariff actions.

Meanwhile, on the sideline of the meeting, US Treasury Secretary Steven Mnuchin told a news conference on Sunday that he had had no substantive discussions on bilateral trade disputes with China’s finance minister, Liu Kun, at the G20 gathering, engaging mainly in “chit-chat”. Mnuchin had said before the summit that no such meetings were planned.

“Any time they want to sit down and negotiate meaningful changes, I and our team are available,” Mnuchin said on Sunday.

The Chinese delegation did not speak to media at the G20 meeting.

US Treasury Secretary Steven Mnuchin not planning China meetings at G20 summit

The finance ministers and central bank governors from the world’s 20 largest economies warned that growth, while still strong, was becoming less synchronised and downside risks over the short and medium-term had increased.

“These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies,” the G20 finance officials said in a communique.

“We ... recognise the need to step up dialogue and actions to mitigate risks and enhance confidence,” the communique said.

This marked a strengthening of language compared to their previous statement issued in March, in which they simply “recognise the need for further dialogue”.

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“The latest language suggests a great deal of urgency about resolving these issues,” Australia Treasurer Scott Morrison told Reuters in an interview, adding that the ministers had made it clear in the discussion that they were concerned about tit-for-tat measures and that open trade was the goal.

“The language previously had been a bit ambiguous about that, a bit sheepish,” Morrison added.

The weekend talks in Buenos Aires came at a time of escalating rhetoric in the trade conflict between the United States and China, the world’s largest economies, which have so far slapped tariffs on US$34 billion worth of each other’s goods.

US President Donald Trump raised the stakes on Friday with a threat to impose tariffs on all US$500 billion of Chinese exports to the United States unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.

Mnuchin focused instead on other trade relationships at the talks, including those with the European Union, Canada, Mexico and Japan.

He said G7 allies were taking seriously his calls to eliminate tariffs, non-tariff barriers and subsidies among the group, and the Trump administration would pursue such ideas in trade talks next week with European Commission President Jean-Claude Juncker in Washington.

China and EU told to respect free trade as Steven Mnuchin says US’ goal is no tariffs, no barriers, no subsidies

Canadian Finance Minister Bill Morneau called the dropping of barriers a “great idea” and an “aspirational target”, but said it would be challenging to execute because of historical economic differences.

Before any trade talks with the EU could begin, French Finance Minister Bruno Le Maire insisted that Washington first would need to drop its tariffs on steel and aluminium and stand down on a threat to impose automotive tariffs.

European Commissioner for Economic and Financial Affairs Pierre Moscovici told reporters that the meeting was not tense, but produced little movement from entrenched positions on trade.

“We were in mutual listening mode and I hope that this is the beginning of something,” Moscovici said. “But still the positions are not similar.”

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Finance ministers for both Mexico and Canada said they saw optimism from Washington that an agreement to modernise the trilateral North American Free Trade Agreement (Nafta) could be reached in the coming months after talks stalled.

Trump has angered allies by imposing import tariffs of 25 per cent on steel and 10 per cent on aluminium, sparking retaliatory tariffs from the EU and Canada on a range of US products.

Trump, who frequently criticises Europe’s 10 per cent car tariffs, is also studying adding a 25 per cent levy on auto imports, which would hit both Europe and Japan hard.

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Mnuchin said he did not feel isolated at the G20, holding numerous meetings with officials, and arguing that Trump’s trade stance was based not on protectionism but on trying to make trade fairer.

“We very much support the idea that trade is important to the global economy, but it’s got to be on fair and reciprocal terms,” he said.

Hubert Fuchs, European Council representative to the G20, said he welcomed Mnuchin’s candid approach, but said the US “understands something different under fair and free trade”.