Finance minister warns of trade friction at G-20Korean Finance Minister Kim Dong-yeon slammed the Trump administration’s protectionist policies at a G-20 Finance Ministers meeting in Buenos Aires, saying they could invite a spiral of retributions.
According to the Finance Ministry, Kim on Tuesday warned that recent conflict over trade has become a major risk for the global economy.
Kim made his remarks a day after meeting U.S. Treasury Secretary Steve Mnuchin to ask him to exclude South Korea from new tariffs on imported steel.
“The recent trade conflict could start a chain of other trade regulations by other countries as retaliation,” Kim said. “These situations are highly contagious.”
He said there is a need for layered policies that prevent trade conflict from escalating into an actual threat to the global economy.
“While each country should manage macroeconomic policies with stability to prevent [trade] imbalances, there should be efforts in solving the fundamental cause to trade protectionism by strengthening the inclusiveness of economies,” Kim said.
Kim wasn’t the only economic minister to worry about trade protectionism by the United States. In a communique released Tuesday at the close of the two-day meeting, finance ministers and central bank governors from 20 economies agreed to reduce global imbalances and promote greater inclusiveness and fairness and reduce inequality in pursuit of economic growth.
“We are working to strengthen the contribution of trade to our economies,” the communique stated.
“We agree on a set of principles to foster economic resilience which provides an indicative menu to be considered in the update of G-20 countries growth strategies under the Hamburg Action Plan,” it continued.
The Hamburg Action Plan, adopted at a G-20 leaders summit in Hamburg last year, calls for fighting trade protectionism, including all unfair trade practices.
But it also recognized the role of legitimate trade defense instruments.
After the meetings, Mnuchin said in a press conference that it is not in U.S. interests to start a trade war. But if it finds itself in one, he said, it will not back down.
“We need to be prepared to act in the U.S. interest, again, to defend free and fair reciprocal trade,” Mnuchin said.
“There’s a risk of a trade war, the president has said we’re not afraid of getting into a war, given the size of our market, the size of our economy, and the fact that we have a big trade deficit,” he continued.
U.S. President Donald Trump earlier this month tweeted, “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.”
The Buenos Aires meetings took place as a new 25 percent tariff on steel imports and a 10 percent tariff on aluminum are set to go into effect on Friday. Korea is the third-largest exporter of steel to the United States.
BY LEE HO-JEONG [email@example.com]