G-20 finance officials pledge to protect global growth

Ann Santiago
June 11, 2019

"Most importantly, trade and geopolitical tensions have intensified", the G20 said, adding they "stood ready to take further action" if required.

Mnuchin met People's Bank of China Governor Yi Gang on Sunday in the first meeting of high-level USA officials in a month.

The world's top financial policymakers yesterday admitted that trade tensions had worsened, posing a risk for the global economy, after a G20 meeting that laid bare differences between the USA and other nations. The statement also contains no admissions that the deepening US-China trade conflict was hurting global growth.

After 30 hours of wrangling in what one official described as a "tense" atmosphere, G20 finance ministers and central bank chiefs drafted a final statement acknowledging that "growth remains low and risks remain tilted to the downside".

Treasury Secretary Steven Mnuchin wrote on Twitter that his talks with People's Bank of China Governor Yi Gang were constructive and candid.

Last year, Chinese officials agreed to negotiate changes to the economic relationship with the US, but White House officials said several weeks ago that Chinese officials had begun backtracking, leading Trump to ratchet up pressure and tariffs.

Japanese officials said prior to the meeting that Aso would explain Japan's stance that the issue of global current account imbalances should be addressed through multilateral policy coordination, rather than through a bilateral trade deal.

Finance ministers and central bank governors meeting in Japan this weekend will try to make headway on long-standing issues such as how much global giants like Facebook and Amazon should pay in taxes.

Uncertainty was sense that lingered among the finance ministers of G20 nations as they flew back to their respective countries after wrapping up a meeting in Japan. Together they would encompass nearly everything China exports to the U.S.

But Geng said China has noticed that recently the USA side has said many times it hopes to arrange a Xi-Trump meeting then. Washington raised tariffs on Chinese goods and threatened new levies, while Beijing has retaliated.

Mnuchin told reporters that he expected that any major progress in resolving the impasse would likely come at a meeting of Presidents Donald Trump and Xi Jinping during the G-20 summit in late June in Osaka, Japan. However, Trump is apparently still willing to move forward with his threats of imposing tariffs on Mexican imports if the country does not keep its end of the deal.

Aso said "market confidence could be eroded" if there were no rapid resolution to the ongoing trade war between Beijing and Washington, which has seen the world's top two economies impose billions of dollars of tit-for-tat tariffs and threaten even tougher action. "If not, we'll go forward with our plan" to impose more tariffs, Mnuchin said during a briefing Saturday in Fukuoka, Japan.

The weakness has prompted central banks, most recently in Australia and India, to slash interest rates to fend off recession.

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