G20 finance chiefs agree trade, geopolitical tensions have ‘intensified’, sources say
- Ministers, central bankers set to issue joint statement promising to do more to resolve economic risks
- Communique also likely to say officials ‘reaffirm leaders’ conclusions on trade’ reached at Buenos Aires summit last year
Group of 20 finance leaders agreed to describe trade and geopolitical tensions as “intensified” and pledged to take further action to address these economic risks, three sources said as a second day of meetings got under way on Sunday.
But the finance chiefs also agreed to trim a passage in their joint statement referring to trade, cutting language that stated a “pressing need” to resolve the tensions, according to two officials familiar with the latest draft.
After rocky negotiations that nearly aborted the issuance of a communique, the finance ministers and central bank governors gathered in Fukuoka, Japan agreed to affirm language on trade issued in Buenos Aires in December, the sources said.
The meeting in the Argentinian capital launched a five-month truce between the United States and China to allow for negotiations to end their deepening trade conflict. But the talks hit an impasse last month, prompting higher tariffs on both Chinese and US goods as the dispute nears the end of its first year.
The G20 source said that the communique to be issued later on Sunday would say: “Most importantly, trade and geopolitical tensions have intensified.”
It would also say that the G20 leaders “will continue to address these risks and stand ready to take further action”, the person said. “We reaffirm our leaders’ conclusion on trade at the Buenos Aires summit.”
Finance chiefs find common ground on need to reform tax rules
A joint commitment to urgently resolve the trade war by the G20 would run counter to the US stance that higher tariffs are a legitimate tool to address what it sees as imbalances in its trade with China and other nations.
US Treasury Secretary Steven Mnuchin was due to meet Chinese central bank governor Yi Gang in Fukuoka, but expectations of a breakthrough this weekend are low. A better chance to restart negotiations that have been on hold since the US ramped up tariffs on Chinese imports last month may come at the G20 leaders’ summit in Japan at the end of the month.
He described the meeting as having parallels to the two presidents’ December 1 meeting after the last G20 summit in Buenos Aires, when Trump was poised to increase tariffs on US$200 billion worth of Chinese goods. That step was taken in May and the US is now poised to impose tariffs on a remaining US$300 billion worth of Chinese goods around the time of the Osaka summit.
At the meeting in Argentina, the G20 leaders described international trade and investment as “important engines of growth, productivity, innovation, job creation and development. We recognise the contribution that the multilateral trading system has made to that end”.
In a communique issued at the time, the leaders called for a reform of World Trade Organisation rules, which they said fell short of objectives and had “room for improvement”. They also pledged to review progress at the Japan summit.
