Finance ministers and central bank chiefs from the World’s 20 major economies pledged today to use all the policies they can to protect global growth from disruptions due to trade and other tensions.
The officials gathering in Japan for the second and final day of the G20 meeting said in a joint communique that risks from trade and geopolitical tensions were “intensifying.”
Thought not referring directly to the ongoing trade war between the United States and China, leaders participating in the meetings indicated it was the No. 1 concern.
“We will continue to address these risks, and stand ready to take further action,” the statement said. “We reaffirm our commitment to use all policy tools to achieve strong, sustainable, balanced and inclusive growth, and safeguard against downside risks.”
“Global growth appears to be stabilizing and is expected to pick up later this year and next year,” the statement said.
According to AP, however, there was an evident rift between most participants in the meeting and the U.S., which has shifted away from support for tackling issues in multilateral forums such as the World Trade Organization in favor of a country-by-country “America First” approach.
French Finance Minister Bruno Le Maire said the discussions showed “we are very concerned about the trade war between the U.S. and China,” urging both sides to resolve their disputes through the WTO.
“I want to insist on this matter because it is high time that we stop the trade dispute between the U.S. and China from having a really long-term, deep and negative impact on growth,” Le Maire said.
On her part, Christine Lagarde, managing director of the International Monetary Fund, bluntly warned of the potential toll from the exchanged tariff hikes and other retaliatory moves between Washington and Beijing. She said that the “road ahead remains precarious.”
“The principal threat stems from continuing trade tensions,” said Lagarde, adding that the IMF estimates the tariffs could reduce the level of global GDP by 0.5 percent in 2020, or about $455 billion.