President Donald Trump seems to have won a big victory after hours of discussions and delays amid tensions over trade comments between the G20 finance ministers and the United States.
The main theme of the discussion was President Trump’s new administration’s decision to change the global order of commerce. G20’s finance chiefs finally renounced their intentions to sign a pledge which was meant to avoid protectionism and instead they signed up a generic statement on trade.
Despite the fact that the United States did not get everything it wanted from the meeting, the G20 released a statement earlier on Saturday saying that they are willing to, let me quote:
We are working to strengthen the contribution of trade to our economies. We will strive to reduce excessive global imbalances, promote greater inclusiveness and fairness and reduce inequality in our pursuit of economic growth.”
Even if that may sound like legalese to the regular reader, which it actually is, the communique from the group of world’s largest economies omits to deliver on the crux of the matter, i.e. a pledge to avoid all forms of protectionism, which is exactly what Donald Trump wished for. The G20 meeting took place over 2 days at Baden Baden in Germany and it marked US Treasury Secretary Steven Mnuchin, a former Goldman Sachs CEO’s first public appearance in an international forum in his new position.
Mnuchin’s attitude reflected President Trump’s vision about how America had a bad deal until now with regard to how the global commerce was set up. To put it bluntly, Steven Mnuchin followed Trump’s America First/bilateral trade paradigm which is in antithesis with the rest of G20’s delegates who favor a multilateral based system as per WTO’s rules and regulations.
While China was fiercely against protectionism, as expected, the rest of the G20’s finance ministers ended the talks without renewing their pledge to free trade and repudiation of protectionism following Mnuchin’s strong opposition, thus marking a break with a ten year old tradition.
Trump’s new administration announced that it considers draconian trade measures for curbing imports via a border tax and will never agree to live under the previous G20 paradigm, thus clashing with China and Europe’s view over global trade issues.
The G20 meeting ended with no agreement on trade in a gravitas atmosphere which comes as a consequence of President Trump’s anti globalization mood he had brought to DC and now in the first G20 meeting between US Treasury Secretary and G20’s finance ministers.
Source Photo: Reuters