Financial leaders from the Group of 20 have expressed concerns that the trade friction triggered by the United States' protectionist policies could pose downside risks to the global economy.
In the G20 meeting of finance ministers and central bank governors held over the weekend in Buenos Aires, the capital of Argentina, most of the delegates from the group agreed that the tariffs fly in the face of the central tenet of today's developed and emerging economies－that protectionist measures only inhibit trade and growth.
French Finance Minister Bruno Le Maire said a global trade war would leave everyone as "losers" after U.S. President Donald Trump unilaterally imposed high tariffs on imported steel and aluminum products, provoking strong opposition from the U.S. business community and retaliatory measures from U.S. trading partners.
"The U.S. must avoid pushing the world into a 'survival of the fittest' scenario through tit-for-tat trade sanctions," Le Maire said.
Saying the trade war will "produce only losers and destroy jobs and put pressure on global growth", Le Maire called on the U.S. to "see sense" and to respect the rules of multilateralism.
Before the meeting started, U.S. Treasury Secretary Steven Mnuchin told reporters he was set to "respond to concerns on U.S. trade policies" at the meeting, and that he will renew Trump's proposal that G7 allies drop trade barriers between them. The European Union should respect "free, fair and reciprocal trade", he added.
Le Maire, however, said in response that the EU would not consider launching trade talks with the U.S., telling Agence France-Presse that "we refuse to negotiate with a gun to our head" and "it must be the U.S. that takes the first step to de-escalate".
Christine Lagarde, managing director of the International Monetary Fund, said at the gathering that increasing trade restrictions would pose "the greatest near-term threat" to the world economy.
Lagarde said that, taking into account "current announced and in-process measures", an IMF report warns that existing trade restrictions would reduce global GDP by 0.5 percent, amounting to around $430 billion.
Her warning came shortly after Mnuchin said in Buenos Aires that there was no "macro" effect yet on the world's largest economy.
The last G20 finance meeting, in Buenos Aires in late March, ended with no firm agreement by ministers on trade policy except for a commitment to "further dialogue".
German Finance Minister Olaf Scholz said, "I don't expect tangible progress to be made at this meeting", citing concerns about the escalating trade disputes.
Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G20 gathering would lead to an easing of retaliatory trade measures, since "trade protectionism benefits no one involved".
