G-20 Meeting Ends With Little Progress on Tariffs
July 22 2018 - 6:34PM
Dow Jones News
By Jeffrey T. Lewis
BUENOS AIRES -- The finance ministers and central bankers of the
G-20 group of countries ended their meeting here with little
progress on resolving global trade tensions sparked by President
Donald Trump's tariffs, with the U.S. and EU both insisting their
conditions for trade talks must be met.
U.S. Treasury Secretary Steven Mnuchin got the ball rolling
Saturday morning when he told reporters that the U.S. is ready to
start talks on trade agreements with China, the EU and the
Japanese, but that those trading partners must first level the
playing field by removing tariffs, non-tariff trade barriers and
subsidies.
Mr. Mnuchin specifically mentioned that U.S. companies shouldn't
be forced into joint ventures with Chinese companies to do business
in China nor be forced to transfer technology.
He upped the ante by adding that "it's definitely a realistic
possibility" Mr. Trump will follow through on a threat to impose
tariffs on all $500 billion worth of goods the U.S. imports from
China each year. The U.S. has already set levies on $34 billion of
machinery and components from the Asian country, with tariffs on
another $16 billion of imports scheduled. The Trump administration
also is looking at targeting an additional $200 billion of Chinese
products.
French Finance Minister Bruno Le Maire returned fire later
Saturday, saying the EU wouldn't hold any talks while the U.S.
tariffs are in effect because "we refuse to negotiate with a gun to
the head." And if the U.S. follows through with a proposed 25%
tariff on imported cars, Europe would have no choice but to
retaliate, he said.
The EU is ready to hold talks on changes to the existing
multilateral trade system, including at the World Trade
Organization, but only if reforms are intended to strengthen the
system and not weaken it, Mr. Le Maire explained.
The meeting in the Argentine capital was scheduled to
concentrate on issues including infrastructure for development and
the future of work, but the conflict over Mr. Trump's tariffs on
steel, aluminum and Chinese electronics and other goods, and the
retaliatory tariffs imposed by the EU, China and other countries,
were a constant undercurrent.
One concern of many participants in the meetings brought up was
the effect of the tariffs on economic growth. International
Monetary Fund Managing Director Christine Lagarde told delegates on
Saturday that her organization estimated the conflict would cost
the world around 0.5% in gross domestic product, based on current
measures and "in the worst case scenario."
The U.S. would be harder hit than other countries by the
tit-for-tat tariffs because a larger share of its exports will be
subject to the punitive levies, according to the IMF's
calculations.
Mr. Mnuchin said the U.S. government is monitoring the impact of
the tariffs very closely, but that on a macroeconomic basis "we
don't see yet any impact on the economy."
He added that the producers of some goods, such as lobsters in
Maine and bourbon whiskey in Kentucky, are feeling the effects.
When asked if he expected an impact at the macro level in the
future, he replied "I don't."
At a press conference following the end of the meeting, Mr.
Mnuchin played down any divisions among members of the G-20
regarding trade, saying the meeting was very productive and that "I
didn't feel Isolated at all. I had no time to fit in any more
meetings, or I would have had more meetings."
The EU, China, Canada and Mexico, the U.S.'s biggest trading
partners, have all hit back hard at Mr. Trump's levies on exports,
frequently targeting products, including bourbon, lobsters and
soybeans, produced in regions that support the president.
EU economy chief Pierre Moscovici agreed with Mr. Mnuchin,
saying so far the impact of the trade measures has been "very
limited," while warning that "the risk of escalation is there."
A senior European official who asked not to be identified said
Mr. Mnuchin appeared to be ready to cooperate with the EU to
resolve the trade dispute, but that first the Treasury secretary
would have to convince the president to lift the tariffs.
"What struck me was the willingness of Steve Mnuchin to pave the
way for a solution," the official said. But "I'm not sure the
solution is in [Mr. Mnuchin's] hands."
European Commission President Jean-Claude Juncker will travel to
Washington next week to meet with Mr. Trump for talks on a variety
of subjects, including trade.
Germany's Mr. Scholz said he's hopeful that the meeting produces
advances in resolving the trade dispute, adding that Europeans
won't be pushed around.
"The EU stands united and speaks with one voice," he said.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
(END) Dow Jones Newswires
July 22, 2018 18:19 ET (22:19 GMT)
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