Finance Ministers of the G20 Countries Met in Buenos Aires

Marco Green
March 20, 2018

Finance ministers and central bankers from the 20 leading industrial and developing countries are meeting in Argentina at a summit that has been eclipsed by growing concerns over the potential of a global trade war following U.S. President Donald Trump's decision to slap import tariffs on steel and aluminum.

The summit, held at the capital's Center of Exhibitions and Conventions (CEC), gathered 22 finance ministers, 17 central bank governors and 10 heads of global organisations, including IMF Director-General Christine Lagarde and Administrator of the United Nations Development Programme Achim Steiner.

On Sunday Scholz said he would seek to dissuade Washington from imposing the planned punitive steel and aluminum tariffs which only come into effect on March 23.

The U.S. steel and aluminum tariffs have raised global alarm that the U.S. would dismantle the trading system based on World Trade Organization rules in favor of unilateral actions.

"There is a solid understanding among the global community that free trade is important", Japanese central bank governor Haruhiko Kuroda told reporters upon arrival for the talks.

But the European Union has threatened retaliatory tariffs on U.S. goods unless it is exempted. He added that he expected the final communique to emphasize the importance of free trade. This was replaced with a watered-down pledge to "strengthen the contribution of trade to our economies".

The broad anti-China tariffs and investment restrictions under consideration as part of a US intellectual property probe have raised concerns that retaliation could hit world trade and choke off the strongest global growth since the G-20 head of state summits began during the financial crisis a decade ago. Protectionism could damage growth, he added.

"The reemergence of unilateral trade restrictions may escalate tensions and fuel global protectionism, disrupting worldwide supply chains and affecting long-term productivity", the International Monetary Fund said.

U.S. Treasury Secretary Steve Mnuchin pushed back at the meeting, saying the U.S. could not sacrifice its own interests so that the system worked.

Increasing state control of China's economy "has not been good for us and the world and will continue to cause difficulty", Malpass said.

Officials are also discussing issues including infrastructure development and the technology behind cryptocurrencies during the two-day meeting that began Monday in the Argentine capital.

Unilateral decisions by the United States to impose tariffs are seen as going against negotiated, or "multilateral" measures that would be part of the WTO.

"We want to create a new asset class to close this gap", Argentine Treasury Minister Nicolas Dujovne said in a speech on Sunday, noting that there is enough liquidity to finance infrastructure projects but the way they are now structured makes it hard to lure investors.

Other reports by Click Lancashire

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