Published: Mon, June 10, 2019
Markets | By Otis Pena

G20 finance chiefs to warn of trade risks, differ on how pressing

G20 finance chiefs to warn of trade risks, differ on how pressing

A fifth draft of the communique seen by Bloomberg News on Saturday included a reference to a "pressing need to resolve trade tensions", which was omitted in the final statement.

Group of 20 finance leaders agreed to describe global trade and geopolitical tensions as "intensified" but failed to express the desire to resolve them, three G20 sources said as a second day of meetings got underway on Sunday.

"The escalating trade war between the world's two largest economies is no doubt negative for the world economy, but one aspect can be positive: the US and China diverting imports away from each other to other countries can benefit some industries in those economies", Nomura analysts said in a report.

According to finance ministers and central bank governors of the G20, global trade tensions are set to adversely impact economic growth in 2019 and 2020. Most importantly, trade and geopolitical tensions have intensified.

Mnuchin's comments came on the sidelines of a meeting of finance ministers of G 20 economies in Fukuoka, Japan, and ahead of the Treasury Secretary's meeting with Yi Gang, the Governor of the People's Bank of China.

"The two countries don't have any issues on this point", Aso told a news conference after a meeting of G20 finance leaders in Fukuoka, southern Japan. The statement also contains no admissions that the deepening US-China trade conflict was hurting global growth. "If they don't, we'll proceed with our tariffs".

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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.

But Mnuchin, who has co-led Washington's side in the stalled trade talks with U.S. Trade Representative Robert Lighthizer, said, "I'm hearing concerns if we continue on this path there could be issues".

While they urged the stick to the global rules that it spent decades promoting before President Donald Trump took office, the officials both in the southern Japanese city of Fukuoka and at parallel talks on trade and the digital economy in Tsukuba, near Tokyo, said there is a consensus on the need to revamp the WTO to bring it more in line with the digital economy realities of the 21st century.

Washington has imposed and then toughened import tariffs on Chinese goods in a bid to reduce the United States' trade deficit and combat what it calls unfair trade practices.

Mnuchin said Trump and Chinese President Xi Jinping would meet at a June 28-29 G20 summit in Osaka.

The Buenos Aires meeting in December won a five-month trade-war truce between Washington and Beijing, but ongoing talks hit an impasse last month, prompting another round of tariffs. "We have plenty of other issues that we need to consider", he said. "We recognize the contribution that the multilateral trading system has made to that end".

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