The United States sought to woo Europe and Japan with free trade deals to gain leverage in an escalating tariff war with China but its overtures faced stiff resistance from France at a G20 finance ministers meeting.
US Secretary of the Treasury Steven Mnuchin (left) and French Finance and Economy Minister Bruno Le Maire during a bilateral meeting in Buenos Aires. Photo: AFP
US Treasury Secretary Steven Mnuchin told reporters at the gathering of the financial leaders of the world's 20 largest economies in Buenos Aires that he was renewing President Donald Trump's proposal that G7 allies drop trade barriers between them.
"If Europe believes in free trade, we're ready to sign a free trade agreement," Mr Mnuchin said, adding that such a deal would require the elimination of tariffs, non-tariff barriers and subsidies. "It has to be all three issues."
Mr Trump has angered European allies by imposing import tariffs of 25 percent on steel and 10 percent on aluminium, causing the European Union to retaliate with similar amounts of tariffs on Harley-Davidson motorcycles, Kentucky bourbon and other products.
Mr Trump, who frequently criticizes Europe's 10 percent car tariffs, is also studying adding a 25 percent levy on automotive imports, which would hit both Europe and Japan hard.
French Finance Minister Bruno Le Maire said the European Union would not consider launching trade talks with the United States unless Mr Trump first withdraws the steel and aluminium tariffs and stands down on a car tariff threat.
"We refuse to negotiate with a gun to our head," Mr Le Maire told reporters on the sidelines of the G20 meeting.
Mr Mnuchin's offer to the European Union and Japan - along with a renewed effort to jump-start stalled talks with Mexico and Canada to modernize the North American Free Trade Agreement - come as the United States and China are at loggerheads in an escalating trade dispute with no talks in sight.
The world's two largest economies have slapped tariffs on $34 billion worth of each other's goods so far. Mr Trump on Friday threatened to impose tariffs on all $500bn of Chinese exports to the United States unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.
Mr Mnuchin is not meeting formally with any Chinese officials at the G20 meeting, but said that was because his normal counterpart, top Chinese economic adviser Liu He, is not attending.
The International Monetary Fund (IMF) also warned that the recent wave of trade tariffs would significantly harm global growth.
- Reuters