Finance ministers and central bank chiefs from the Group of 20 major economies wrapped up a meeting in Japan on Sunday with a pledge to use all the policies they can to protect global growth from disruptions due to trade and other tensions.
The G-20 finance leaders said in a joint communique that risks from trade and geopolitical tensions were "intensifying." They did not refer directly to the tariffs war between the United States and China, though 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.
But 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 current global slowdown was linked to political issues, "especially trade tensions."
"So it's high time that we put an end to those tensions and we should avoid trade wars which would have real deep negative impact and long-term impact on global growth," he said.
He urged China and the U.S. to resolve their disputes through the WTO, saying it "is only within the multilateral framework that we can find long-term solutions for present trade tensions."
Christine Lagarde, managing director of the International Monetary Fund, likewise was blunt in warning of the potential toll from the tit-for-tat tariff hikes and other retaliatory moves between Washington and Beijing with talks on resolving their dispute in a stalemate, saying 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.
"To mitigate these risks, I emphasized that the first priority should be to resolve the current trade tensions — including eliminating existing tariffs and avoiding new ones — while we need to continue to work toward the modernization of the international trade system," Lagarde said.
While they urged the U.S. to stick to the international rules that it spent decades promoting before President Donald Trump took office, the officials both in the southern Japanese city of Fukuoka and at parallel talks on trade and the digital economy in Tsukuba, near Tokyo, said there is a consensus on the need to revamp the WTO to bring it more in line with the digital economy realities of the 21st century.
Trump has said he prefers deal-making on a country-to-country basis. While there is no sign Beijing and Washington are ready to resume trade talks that stalled last month after 11 rounds of negotiations, U.S. Treasury Secretary Steven Mnuchin said he had a constructive meeting Sunday with China's central bank Gov. Yi Gang on the sidelines of a financial leaders' meeting in Fukuoka.
In a Twitter post that showed the two clasping hands, Mnuchin said he and Yi "had a candid discussion on trade issues." He gave no details.
Mnuchin told reporters that he expected that any major progress in resolving the impasse would likely come at a meeting of Presidents Donald Trump and Xi Jinping during the G-20 summit in late June in Osaka, Japan.
Trump has yet to decide, Mnuchin said, on whether to impose more 25% tariffs on $300 billion worth of Chinese exports. That would be on top of tariffs of up to 25% on $250 billion in Chinese goods. Together they would encompass almost everything China exports to the U.S.
There was no immediate word from the Chinese side about the meeting between Yi and Mnuchin.
At the meeting of trade and economy ministers in Tsukuba, a government research hub, the officials endorsed a similar set of recommendations, while also issuing a mild call to "handle trade tensions and to foster mutually beneficial trade relations."
"We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, to keep our markets open," they said. "We recognize our business community's call for the G20 to continue supporting the multilateral trading system."
Japan, the world's third-largest economy, is hosting the G-20 for the first time since it was founded in 1999.
The venue for the annual financial meeting, Fukuoka, is a thriving regional hub and base for startups. Much attention at the G-20 meetings this year has focused on how to adapt tax systems and regulation to the increasingly digital nature of business.
While Mnuchin and other officials made it clear that they disagreed on the details of how to do that, the officials said they had agreed that the G-20 and Organization of Economic Cooperation and Development would work together on drawing up an agreement by the end of 2020.
The G-20 group includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.
