Trump’s Trade War Has Intensified Trade And Political Tensions Worldwide
Trump's trade war is now the "principal threat" to global economic growth, said G20 finance leaders on Sunday at their G20 Summit Finance Ministers and Central Bank Governors' Meeting in Fukuoka, Japan.
G20 finance leaders and central bank governors said trade and geopolitical tensions have "intensified," raising the risks to boost global economic growth. They stopped short of calling for a final solution to the U.S.-China trade war, however.
The 30 hour-long meetings took place in what many of those present described as a tense atmosphere created by American demands that exposed the deep divide between the United States with its protectionist outlook and other nations championing free trade.
"Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020," said the G20 finance leaders in a communiqué only reached after wrangling with the U.S. over its wording. The compromise communiqué demanded by Washington omitted language from a previous draft that mentioned a "pressing need to resolve trade tensions."
"However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action."
The statement was a disappointing finale to two days of talks in Fukuoka that also came to grips with the thorny issues of taxing internet giants and, for the first time, the economic challenges posed by aging.
The International Monetary Fund (IMF) previously said US-China tariffs could cut 0.5 percent from global GDP in 2020 or about $455 billion. It stressed the need for the U.S. and China to resolve their seemingly intractable differences to avoid plunging the world economy into another recession.
IMF chief Christine Lagarde has said trade conflicts pose the "principal threat" to global economic growth. Tariffs imposed by the world's top two economies could make a "significant dent" in the global recovery, she noted.
As regards reforming the global tax system to impose adequate taxes on internet giants such as Google and Facebook, the G20 agreed to "redouble our efforts for a consensus-based solution with a final report by 2020."