The world's top financial officials meeting in the nation's capital called for more dialogue on trade disputes that threaten global economic growth with one official warning that differences remain and tensions could escalate further.
Representatives of the G20 nations pleaded Sunday for increased dialogue to defuse escalating trade tensions that could hit global economic growth hard, drawing to an end a summit in Buenos Aires.
Finance ministers and central bank governors from 20 leading economies closed a two-day meeting in the nation's capital by warning that "heightened trade and geopolitical tensions" threaten the economic expansion.
It comes at a time when US President Donald Trump's protectionist policies have provoked ire from traditional allies such as the European Union, Canada and Mexico, and sparked a series of retaliatory measures.
The G20's final communiqué stressed "the need to step up dialogue and actions to mitigate risks and enhance confidence" amidst fears of an escalating global trade war.
It warned that although the global economy remains robust, growth is becoming "less synchronised" and risks over the short and medium terms have increased.
"These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies," the communiqué said.
While the statement did not mention the United States – which is at the centre of trade disputes with G20 members China, the EU and others – it demonstrated more concern than in March, when the group avoided the issue altogether.
Treasury and Economy Minister Nicolás Dujovne hinted in a press conference that the G20 could not afford a rupture over trade disputes which he said should be resolved directly between governments or through the World Trade Organisation (WTO).
"It's not about denying differences," Dujovne told reporters at the conclusion of the meeting. But "we have to try to emphasize consensus because we recognise the importance of keeping this group alive and in harmony."
During the 2008 global financial crisis the G20 was critical in preventing an even worse outcome and saved millions of jobs, he said, noting that "it's in the bad times when you see how essential it is."
Washington on defensive
But US Treasury Secretary Steven Mnuchin reiterated his claim that Washington merely wants "more balanced trade" with other countries.
Mnuchin also dismissed the economic impact of the raft of tariff hikes and retaliatory duties, saying so far they have only affected the US on a "micro" scale. But from a "macro standpoint we do not yet see any significant pattern on the economy."
US businesses have been hit with a series of punitive measures by China, the EU, Canada and Mexico, including tariffs on soybean, motorcycles, bourbon and other goods, while manufacturers are complaining about rising prices of key supplies subject to new US duties.
EU finance chief Pierre Moscovici hit out at Trump's protectionist policies, but said cool heads are needed to resolve the dispute.
"These meetings have been taking place in an international context which is very challenging," Moscovici told reporters. "Trade tensions remain high and they threaten to escalate further."
Moscovici said the summit that began Saturday had not been "tense," and that countries must remain "cool-headed and maintain a proper sense of perspective."
The US and EU have been at loggerheads since Trump angered European allies by imposing tariffs on steel and aluminum. He also has threatened to hit auto imports with duties which would be especially hard for Germany.
While the EU is "willing to build bridges," Moscovici told reporters "we believe that targeting us is certainly inappropriate... and that we must act with the US as allies – not foes but allies."
Mnuchin insisted the US wants to "resolve the trade issues with the EU" and the complaint often is more about "non-tariff barriers" than tariffs.
"We have a trade imbalance with many countries as a result of not exactly free and fair trade," he said. Earlier in the meeting he said the dispute with the EU could be resolved by agreeing to trade with no tariffs, no barriers and no subsidies.
Muscovici warned that "further trade escalation conflicts would negatively affect" all the countries involved, the US included. Protectionism benefits no one, and creates "no winners, only casualties."
International Monetary Fund chief Christine Lagarde agreed, and again spoke out against the tit-for-tat tariffs and urged that "trade conflicts be resolved via international cooperation without resort to exceptional measures."
The IMF warned recently that in a worst-case scenario, US$430 billion of global GDP – or a half percentage point – could be lost in 2020 if all tariff threats and retaliations are carried out.
As well as imposing tariffs of 25 percent on steel and 10 percent on aluminium, Trump hit China with a 25-percent punitive levy on US$34 billion of goods, with tariffs on the way on an additional US$16 billion, and US$200 billion more under consideration.
And in a television interview aired last week, Trump threatened to impose duties on the entire US$500 billion of goods the US imports from China.
"We want our companies to have the same access to their markets that they have to us," Mnuchin said about the Asian giant. "We don't force joint ventures on them, we don't want our companies to have joint ventures there."
The US has long complained that China steals US technology through forced transfers or outright theft, and the issue is at the heart of Trump's trade offensive.
Mnuchin said, "we want to have the right to protect our IP and our technology, anywhere in the world, that's not just China specific."
The Group of 20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging economic powers including China, Brazil, India and Argentina. President Mauricio Macri's government holds the presidency of the G20 this year.
Officials in Buenos Aires also discussed issues including the future of work and infrastructure for development, the international tax system and financial inclusion. It is the third of five meetings by finance ministers and central bankers scheduled in advance of a main G20 meeting in Argentina that will be held November 30 to December 1.
It was confirmed over the weekend that President Trump will visit Buenos Aires for the summit.