BUENOS AIRES – Finance leaders from the Group of 20 major economies said Sunday that heightened trade and geopolitical tensions pose an increased threat to global economic growth, and called for greater dialogue and action.
The G20 finance ministers and central bank governors agreed that international trade and investment are “important engines of growth,” according to their communique issued after a two-day meeting in Buenos Aires, but they stopped short of producing concrete steps to prevent the spread of protectionism.
The meeting came at a time when trade tensions are running high between the United States and China, which have placed new tariffs on $34 billion worth of each other’s goods and threatened further action.
The communique said that the global economy remains robust and unemployment is at a decade low, but that growth has become less synchronized recently and downside risks over the short and medium term have increased.
The risks “include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies,” the communique said.
A U.S. shift toward hardball trade policies under President Donald Trump has drawn the ire of allies. Trump was singled out at a Group of Seven summit last month by host Canada, leading him to angrily withdraw his endorsement of that meeting’s joint statement after its release.
But U.S. Treasury Secretary Steven Mnuchin told a press conference following the meeting in Argentina’s capital that claims his country has adopted protectionist policies are baseless and the G20 remains united.
Mnuchin also said Washington is prepared to hold discussions with Beijing on the escalating trade dispute between the world’s two largest economies.
Finance Minister Taro Aso told reporters that trade issues “should be discussed not only bilaterally but also multilaterally.”
Christine Lagarde, managing-director of the International Monetary Fund, said in a press release that she “urged (the G20) once more that trade conflicts be resolved via international cooperation without resort to exceptional measures.”
The G20 reiterated its commitment to refraining from competitive currency devaluations aimed at gaining an unfair trade advantage, days after Trump accused China, the EU and others of “manipulating their currencies and interest rates lower.”
In a tweet Friday, Trump also said the U.S. dollar “gets stronger and stronger with each passing day — taking away our big competitive edge.”
The dollar plunged against major peers including the euro and the yen following the tweet.
The G20 communique also warned of risks to emerging market economies arising from the U.S. Federal Reserve’s raising of interest rates, saying that while they “are now better prepared to adjust to changing external conditions, they still face challenges including market volatility and reversal of capital flows.”
The G20 consists of Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the U.S. and the EU.