G-20 leaders struggle to find compromise on trade policy

Kristopher Drake
July 10, 2017

The U.S. started cracking down on cheap steel imports in 2016 when Barack Obama was still president.

Last week China panned the Trump administration's proposed approach, which would impose new hurdles for Chinese steel producers that are already subject to more than 100 US antidumping and countervailing duties. "We ask the G-20 economies to join us in this effort and to take concrete actions to solve these problems".

He warned however, that a broad US claim to national security would put global trade on a slippery slope. Remedies taken under the national-security exception would make it hard for other countries to successfully bring a complaint to the World Trade Organization. For example, U.S. Steel went up 8% in June. "Going into the G-20, [the proposed trade pact is] demonstrating that indeed the European Union and Japan want to continue to have a liberal trade agenda and show that there are other countries able to pursue this agenda without the United States".

U.S. President Donald Trump will have a keenly watched one-on-one meeting with Russian President Vladimir Putin, which comes amid congressional and FBI investigations into links between Trump's campaign aides and Russia.

The Sept. 5 communique urged the OECD to help countries "enhance communication and cooperation", take "effective steps to address the challenges", and "encourage adjustment".

On July 7 and 8, leaders from China, Canada, Japan, and Germany are all expected to press Trump on his Section 232 investigation to determine whether cheap global imports of steel pose a threat to US national security. Trump said China is committing "the greatest jobs theft in the world history". In 2015, China produced 10 times as much crude steel as the United States.

The area will be a point of tension with China in particular amid USA pressure on China to exert further pressure on North Korea, which successfully tested an intercontinental ballistic missile Tuesday. He suggested putting on Chinese imports 45% tariff and said he would announce on his first day in the office that China was a currency manipulator, and he said proposing taxing imports from Mexico that he would rip up the trade deals and referred this as the Trans-Pacific Partnership, or TPP.

Trump's announcement that the USA would withdraw from the Paris climate treaty has put him sharply at odds with many other leaders, not least the summit host, German Chancellor Angela Merkel. "Everyone is terrified" that any USA measures on steel "would be a unilateral action and would open up the floodgates for other countries to do the same", he said.

The G-20 decided at last year's summit in China to create a global forum to tackle oversupply. European leaders hope the meeting between Trump and Putin does not mean a weakening of the USA position on the Ukraine question, more than three years after Russia's takeover of Crimea.

On climate, too, the United States - just a year ago a leading voice in favor of global action to reduce carbon emissions - is on its own path.

But while concessions made at Mar-a-Lago to open Chinese market access for U.S. beef, biotechnology applications, and financial services will benefit American businesses, more significant Chinese structural reforms have run into much greater difficulty.

But at this summit, the official said, "there are lots of blank spots" in the drafts of the final statement - "and not on the easy topics".

Trump ruffled other leaders at a G7 meeting in Italy in May and has steered the economic and military superpower on an isolationist "America First" course.

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