G-20 Forges Trade Compromise as Threat of US Tariffs Lingers
- Author: Jacqueline Ellis Jul 10, 2017,
Jul 10, 2017, 0:16
At Donald Trump's last global summit, climate policy was his wild card.
Mr Trump is using the threat of a trade war to demand that global leaders reduce steelmaking capacity.
Sigmar Gabriel, Merkel's deputy, German Foreign Minister said Friday that he was concerned that Europe and the United States might be on the way to a trade war. The prevailing sentiment was that the investigation's results would give Donald Trump the opportunity to crack down on steel imports, and that is an opportunity he would most likely capitalize on.
"We will keep markets open, noting the importance of reciprocal and mutually advantageous trade and investment frameworks", the final communique will say, according to the officials.
Trade analysts expect G-20 leaders to persuade Trump to eschew national security tariffs on steel and aluminum because of the blow-back effect they could have on the stability of the worldwide trading system.
"The G20 countries that had hit USA interests more often before President Trump was elected are the very G20 countries that have cut back on protectionism the most in 2017", said Simon Evenett, professor of economics at Switzerland's St. Gallen University and one of the authors of the Global Trade Alert. Trump's Commerce Department launched its review in April, missed a self-imposed deadline for a decision last month and is expected to announce a verdict soon.
"I always said that this wouldn't be easy and that we shouldn't hide areas of discord", Chancellor Angela Merkel, the summit host, said Saturday at the end of two days of talks.
Given the Trumps newest moves a protectionist trade scenario may affect the U.S. economy and the geopolitical order. "That's a subject that has reached consensus".
As anti-globalization protesters clashed with police across Hamburg, burning cars and looting shops, G-20 officials struggled to bridge their differences. The sticking point was a reference to the US helping other countries "access and use fossil fuels more cleanly". But after hard negotiations, they eventually reached an agreement at the summit on trade.
It's noteworthy that Trump administration officials are mulling a scenario where they grant waivers or tariff quotas to ensure USA allies and North Atlantic Treaty Organisation partners aren't unfairly targeted by any across-the-board tariffs.
The report found that other G20 economies inflicted 52 "hits" against USA commercial interests in the first half of 2017, 29% fewer than in the same period previous year, and a similar decline versus 2015. Juncker said that Europe expects to increase its exports to Japan by a third after trade barriers drop away. But talk led to tension and the rest of the world was almost united in their opposition to Trump's agenda for the USA -and the world.