By Josh Zumbrun, Andrea Thomas and Paul Kiernan
Global finance ministers meeting this week in Buenos Aires were
planning to focus on topics like the workforce in an age of
automation and how to boost infrastructure investment. Instead,
their attention has turned to U.S. tariffs on steel and
aluminum.
Finance ministers and central bankers are meeting under the
auspices of the Group of 20 summit, a gathering of leaders who
represent 80% of the world's economy.
The U.S. would like an agenda focused on its concerns about
China. Instead this year's summit will involve much of the world
trying to pressure the U.S., with French, German and Brazilian
officials identifying the latest U.S. tariff moves as a focus of
discussion.
"We are all very concerned about the possibility of a trade
war," said Marcello Estevão, the Brazilian Finance Ministry's
secretary of international affairs, in a phone interview from
Buenos Aires. He said Brazil planned to highlight protectionism as
a risk to the global economic outlook, adding that "a majority of
countries are with us" in taking this view.
On his way to Argentina, German Finance Minister Olaf Scholz
said the G-20 was the right body to discuss trade. "I believe the
world is growing together and should remain together. Free trade is
a very important resource," he said. Protectionism, he said, "has,
of course, to be discussed."
His French counterpart, Bruno Le Maire struck a similar line.
"We don't believe in protectionism, and that we need to have a
firm, united and European response to the latest decisions taken by
our American partner and ally."
German Chancellor Angela Merkel and Chinese President Xi Jinping
spoke by phone on Saturday, where both agreed to deepen their
strategic partnership and discussed global overcapacity in the
steel sector. The leaders of the two countries facing U.S. tariffs
"agreed to continue working for solutions within the framework of
the G-20 Global Forum," Ms. Merkel's spokesman said.
While finance ministers press their case in Buenos Aires, the
German economics minister Peter Altmaier is traveling to the U.S.
for his first trip abroad "with the aims to conduct talks with the
U.S. government to prevent a trade conflict," according to his
office.
Argentina doesn't want trade on the agenda at this year's G-20,
in part because Argentina too is engaged in delicate negotiations
to be exempted from U.S. tariffs.
Diplomatic relations between the U.S. and Argentina have warmed
since the 2015 election of center-right President Mauricio Macri,
and Argentine officials have expressed optimism that an exemption
may be granted.
Neighboring Brazil, on the other hand, is expected to draw
attention to trade issues at the G-20 as it hopes to shake off
lackluster economic growth and push back against the Trump
administration's tariffs, which Brazilian officials have
criticized.
Unlike Argentina, Brazil, has struggled to rekindle relations
with Washington under President Michel Temer, who took office in
2016 amid the controversial impeachment of his predecessor, and has
been battling corruption allegations for most of the past year.
The U.S.'s biggest trade partners on steel and aluminum are
typical G-20 allies Mexico and Canada, who are unhappy about the
move toward tariffs and are also seeking exemptions.
The focus of G-20 meetings largely revolves around writing a
communiqué of shared principles among nations.
Last July, G-20 officials meeting in Hamburg struggled to hash
out a statement on trade principles that the U.S. and other nations
could agree to. The statement concluded that "international trade
and investment are important engines of growth, productivity,
innovation, job creation and development." The statement included
the line that the G-20 would "recognise the role of legitimate
trade defense instruments."
A senior Treasury official, speaking last week about U.S.
involvement in the G-20, said the recent U.S. moves to establish
tariffs on steel and aluminum were consistent with those principles
expressed in Hamburg, and that G-20 officials in Buenos Aires could
"reiterate" the language from that earlier communiqué.
It isn't clear if Europe, in particular, will agree. The
European Union wants to be exempted from the planned steel tariffs
and has intensified diplomatic efforts to change the Trump
administration's mind. If it isn't granted an exclusion, the bloc
has threatened to respond with $3.4 billion worth of tariffs in
retaliation at certain U.S. products, challenge the tariffs at the
WTO and enact measures to safeguard European industries from steel
and aluminum exports diverted from U.S. markets.
Europeans share U.S. concerns about China's trade practices with
steel. But the EU, along with the Organization for Economic
Cooperation and Development, has called on the U.S. to rely on
global, rather than unilateral solutions to address excess
overcapacity in the Chinese steel industry. The U.S. approach is
especially unpopular because it has the potential to hit Canada,
Mexico and Europe more directly than China, because the U.S.
imports more steel from its closer neighbors.
Write to Josh Zumbrun at Josh.Zumbrun@wsj.com, Andrea Thomas at
andrea.thomas@wsj.com and Paul Kiernan at paul.kiernan@wsj.com
(END) Dow Jones Newswires
March 18, 2018 13:56 ET (17:56 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.