G20 fails to defuse trade war threat

BUENOS AIRES — The world’s financial leaders rejected protectionism on Tuesday and urged “further dialogue” on trade, but failed to defuse the threat of a trade war days before US metals tariffs take effect and Washington is to announce measures against China.

Finance ministers and central bankers of the world’s 20 biggest economies, which represent 75% of world trade and 85% of global gross domestic product, discussed trade disruptions as a risk to growth at a two-day meeting.

But after talks described by participants as “polite” and mainly consisting of readout statements with no debate, the G20 agreed only to stand by an ambiguous declaration on trade from 2017 and “recognize” the need for more “dialogue and actions.” “We reaffirm the conclusions of our leaders on trade at the Hamburg Summit and recognize the need for further dialogue and actions. We are working to strengthen contribution of trade to our economies,” the final G20 ministers’ statement said.

But the declaration did little to dispel concern over a global trade war as US tariffs of 25% on imported steel and 10% on aluminum take effect on Friday.

Two officials briefed on the matter said US President Donald Trump would also unveil tariffs on up to $60 billion in Chinese technology and telecoms products by Friday, a move stemming from Beijing’s intellectual property practices.

The 2017 Hamburg declaration, which the financial leaders referred to on Tuesday, said G20 countries would “continue to fight protectionism including all unfair trade practices.”

But it also said G20 leaders “recognize the role of legitimate trade defense instruments,” an ambiguity which provides the United States with a way to argue its cause on the tariffs. US Treasury Secretary Steven Mnuchin made clear in a press conference after the talks that Washington’s tariff action was such a legitimate defense. — Reuters