Economy

G20 finance chiefs to warn of trade risks, differ on how pressing

G20 finance chiefs to warn of trade risks, differ on how pressing

In the build up to the meeting, Federal Reserve Governor Jerome Powell signaled a willingness to act if the economy needs it, European Central Bank Governor Mario Draghi vowed to support growth while the PBOC's Yi said he has "tremendous" policy options to stoke demand.

Aso and Mnuchin held talks on the sidelines of the Group of 20 meeting of finance ministers and central bank governors in the city of Fukuoka.

Washington has put Huawei on a blacklist that effectively bans US firms from doing business with it, and has put pressure on its allies also to shut Huawei out, arguing that Huawei could use its technology to carry out espionage for Beijing.

The bickering over trade language has dashed hopes of Japan, which chairs this year's G20 meetings, to keep trade issues low on the list of agendas at the finance leaders' meeting.

Most importantly, trade and geopolitical tensions have intensified.

U.S. Treasury Secretary Steven Mnuchin said on Saturday that the leaders' meeting has some parallels with their Buenos Aires summit last December, which saw Washington postpone a tariff hike while the two sides resumed negotiations.

In a Twitter post that showed the two clasping hands, he said they "had a candid discussion on trade issues".

The gathering also marked the first meeting of top USA and Chinese officials since negotiations between both governments for a trade agreement collapsed last month.

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The draft statement, to which all the G20 financial leaders have to agree, contains a sentence in square brackets - which means it was not yet agreed - that trade and investment were important engines of growth.

He and other members of President Donald Trump's administration contend that the ripple effects of the billions of dollars in tariffs imposed by Washington on Chinese exports over the past year are creating new business opportunities for other businesses in the US and other countries.

Trade battles were front and centre of policymakers' minds as the United States and China continue to threaten each other with tariffs that economists fear could hamper global growth.

That June 28-29 meeting is likely to overshadowed by a planned meeting between Trump and Chinese President Xi Jinping.

U.S. Treasury Secretary Steven Mnuchin says he and his Japanese counterpart discussed the ongoing close cooperation between the U.S. and Japan across a number of economic and security issues.

"From our perspective of where we are now, it is a result of them backtracking on significant commitments, '" Mnuchin said.

Taking a different line from the other policymakers, Mnuchin said the slowdown in some parts of the world was not due to trade difficulties and even said the friction could benefit some countries if companies relocated from China to avoid tariffs. Washington raised tariffs on Chinese goods and threatened new levies, while Beijing has retaliated.

Trump has yet to decide, Mnuchin said, on whether to impose more 25% tariffs on $300 billion worth of Chinese exports. "We recognize our business community's call for the G20 to continue supporting the multilateral trading system".