By Isaac Cohen*
The meeting of finance ministers and central bank governors of the Group of Twenty was held in Buenos Aires over the weekend, in preparation of the summit of leaders scheduled for next November. The twenty participating economies represent 85 percent of global production, two thirds of the world’s population and 75 percent of international trade.
As informed by the hosts, the meeting achieved consensus on several agenda items, such as infrastructure financing, financial inclusion and the future of work. However, trade tensions dominated the meeting and they were recognized in the final statement as one of the downside risks confronting the world economy. As quoted in The New York Times 07/23/18, the Managing Director of the International Monetary Fund Christine Lagarde said the already announced tariffs can reduce global economic output by $430 billion, equivalent to 0.5 percent of world growth.
At a concluding press conference, US Treasury Secretary Steven Mnuchin recognized that discussions on trade issues were often very “direct.” He added that the US delegation did not feel isolated, because he had held more than 20 meetings with other delegations.
Meanwhile, domestically, 149 members of the US Congress signed a letter saying protective tariffs can undermine economic security. Also more directly, the Chairman of the Senate Finance Committee, the influential Senator Orrin Hatch (R-Utah) in a letter addressed to President Donald Trump said, “if the administration continues forward with its overreliance on tariffs, I will work to advance legislation to curtail Presidential trade authority.”
