Economy

Contention Expected at G20 Summit

July 6, 2017

President Trump heads to Hamburg, Germany, today for the G20 summit with trade deficits and steel dumping on his mind. Trump is expected to receive strong opposition on any attempt to use the Section 232 steel investigation as leverage to influence trade talks. G20 leaders have been critical of the White House’s casting of national security as a reason for restricting imports of steel and aluminum.

Trump’s determination to crack down on dumping was evident last week when he told South Korean President Moon Jae-in that the U.S. was getting a “rough deal” from the KORUS agreement and called on South Korea to stop enabling the export of dumped steel.

The president is expected to reiterate his campaign promises to take a hardline stance on Chinese steel overcapacity and exports. Frustration over China’s failure to reign in North Korea’s nuclear program is adding to the tension, and imposition of new tariffs would inflame relations further.

President Trump tweeted on Wednesday morning, “The United States made some of the worst trade deals in world history. Why should we continue these deals with countries that do not help us?”

European leaders said they will stand united against U.S. protectionism and defend free and fair trade. German Chancellor Angela Merkel acknowledged to parliament on June 29 that “the world has become less united,” and discussions at the G20 meeting will be difficult. “The discord is obvious, and it would be dishonest to paper over the conflict,” she said. “Whoever believes the problems of this world can be solved by isolationism and protectionism is making a tremendous error.”

French President Emmanuel Macron echoed Merkel’s concerns and pledged that European leaders will be united in response to U.S. trade policies. “If trade is being put into question by one country or another, then we together have to defend those assets that unite us. A lot is expected from Europe and Europe needs to be coherent.”

In a joint letter to EU leaders, Donald Tusk, president of the European Council, and Jean-Claude Juncker, president of the European Commission, wrote:

“Europe’s role in the world and our responsibility at the international level in these turbulent times are growing. More than ever, the EU has become a global point of reference for all those who value the principles of liberal democracy and human rights, free and fair trade or concrete actions in facing global challenges, such as climate change, poverty, terrorism and illegal migration. A strong and determined Union is the best way to promote our values and interests, to support a rules-based multilateral system, and ultimately to protect and defend citizens.”

The EU is increasingly turning away from the U.S. and toward China for global leadership. In comments in Berlin on Wednesday, Merkel told China’s President Xi Jinping, “I am delighted to be able to welcome you in a period of unrest in the world, where China and Germany can make an effort to sooth this unrest a bit and to make a somewhat quieter world out of it.”