EU "seduces" the G20 with free trade offers … and finds resistance

The United States attempted to seduce Europe and Japan on Saturday by proposing free trade agreements to win a growing tariff war with China, but withstood the strong resistance of France during World War II. A meeting of G20 Finance Ministers. by commercial tensions.

US Treasury Secretary Steven Mnuchin told reporters at a meeting in Buenos Aires that financial leaders of the 20 largest economies in the world have renewed President Donald Trump's proposal that G7 allies raise trade barriers among them.

"If Europe believes in free trade, we are ready to sign a free trade agreement," said Mnuchin. He added that a pact of this nature would require the elimination of tariffs, non-tariff barriers and subsidies. "They should get into all three questions," he said.

Trump angered his European allies by imposing duties of 25% on steel imports and 10% on aluminum, causing retaliation by the European Union at similar rates on Harley-Davidson motorcycles, Kentucky bourbon and other products.

Trump, who often criticizes European tariffs of 10% on automobiles, also plans to add a 25% tax on imports of motor vehicles, which would hit Europe and the United States hard. Japan.
French Finance Minister Bruno Le Maire said that the European Union (EU) would not consider entering into trade negotiations with the United States unless Washington withdraws its tariffs on steel and aluminum and abandons his cars.

"We refuse to negotiate with a rifle pointed at our head," Le Maire told reporters on the sidelines of the G20 meeting.

Mnuchin's offer to the EU and Japan, as well as an attempt to unblock talks with Mexico and Canada to modernize the North-South Free Trade Agreement. American (NAFTA), arrive at a time when the United States and China They escalate in their commercial conflict without dialogue in sight.

The two largest economies in the world have imposed mutual tariffs on exports valued at $ 34 billion. Trump on Friday threatened tariffs on all Chinese exports to the United States, valued at $ 500 billion.

Mnuchin will not have an official meeting with Chinese officials at the G20 meeting, but he said it was because his usual interlocutor, the official adviser Liu He, was not present at the event.

The International Monetary Fund (IMF) has also warned that the recent wave of tariffs would be detrimental to global growth.

IMF Managing Director Christine Lagarde briefed the G20 Finance Ministers and Central Bank Presidents on the impact of the restrictions already announced on world trade.

In the report, the IMF states that global growth could reach a maximum of 3.9 percent in 2018 and 2019, while downside risks have increased due to rising trade tensions.

Lagarde's presentation comes shortly after Mnuchin declared that there had not yet been a "macro" effect on the US economy.

Mnuchin said that although there are "micro" effects such as retaliation against soy, lobster and bourbon, he did not believe that tariffs would prevent the country from reaching growth of 3% this year. .

"I still believe that from a macro point of view we see no impact on very positive growth," he said, adding that he closely monitors the prices of the company. 39, steel, aluminum, wood and soy.

G7 ALLIES

The dollar posted its largest decline in three weeks on Friday against a basket of six major currencies after Trump again complained about the strength of the US dollar and interest rate hikes by the Reserve federal, which put an end to an escalation that had brought the dollar to its highest level in a year.

The last G20 meeting in Buenos Aires at the end of March ended without a firm agreement on trade policies and only with a commitment to continue the dialogue.

Brazilian Finance Minister Eduardo Guardia said the participants agreed that the risks to the global economy have increased since their last meeting. He mentioned rising trade tensions and higher interest rates in major central banks.

Guard commented that the final declaration will reflect the need for members, particularly in emerging markets that have been affected by the devaluation of their currency, to conduct reforms to protect themselves against volatility.

German Finance Minister Olaf Scholz said that he would use the meeting to advocate for a rules-based trading system, but that expectations were low. "I do not expect tangible progress in this meeting," he told reporters in the plane that brought him to Buenos Aires.

Rates applied by the United States will cost Germany up to 20,000 million euros (about 23,000,440 million dollars) in income this year, according to the leader from the German group IMK.

Meanwhile, the head of the Bank of Japan, Haruhiko Kuroda, said he hoped the meeting's debate would result in a reduction in trade retaliation measures. "Trade protectionism does not benefit any of the parties involved," he said. "I think moderation will end up being imposed."