G20 finance ministers meet in Argentina as trade dominates agenda
G20 finance ministers meet this weekend in Buenos Aires in their first meeting since global trade tensions moved beyond rhetoric into a volley of tariffs and counter-tariffs.
Trade will dominate the agenda in the Argentine capital, with much attention likely to be focused on U.S. Treasury Secretary Steven Mnuchin as he looks to "respond to concerns on U.S. trade policies" at the gathering of finance ministers and central bankers from the world's 20 leading economies.
The EU, China, and Canada will be among those represented, with all of those having come into direct conflict with the trade polices of U.S. President Donald Trump in recent weeks and months.
The U.S. and China have placed $34 billion worth of tariffs and counter-tariffs on each other. More is expected to follow, with the U.S. also placing tariffs on steel and aluminum from the EU, Canada, and Mexico - resulting in further counter-tariffs from those trade partners.
International Monetary Fund (IMF) head Christine Lagarde warned that the current tensions over trade present "the greatest near-term threat" to the world economy.
Host country in crisis
Aside from the trade issues, the meeting will also address crises threatening a number of emerging economies - not least in host nation Argentina, which recently accepted a $50 billion IMF credit line to try to stabilize its economy.
The agreement - and Lagarde's presence in Buenos Aires - has prompted protests from President Mauricio Macri's largely center-left opposition.
They note that besides overriding Congress' budgetary authority, the terms do little to curb a record $31 billion current account deficit - projected to reach $40 billion this year.
Current account deficits ballooned after Macri - with IMF support - moved to liberalize imports and finance, leading to record trade deficits and capital flight in 2017.
These deficits were largely financed with foreign debt - up 70% to $254 billion since Macri took office in late 2015. Public sector foreign debt has in turn doubled as of March to $176 billion.
That excludes $15 billion drawn from the IMF credit line on June 22 - enough to finance just four months of capital flight at the current rate.
The Argentine economy, which grew 2.9% last year, has meanwhile plunged into a severe recession - shrinking 2.7% in April alone.
This would be the 2nd recession since Macri took office.
At: https://www.dw.com/en/g20-finance-ministers-meet-in-argentina-as-trade-dominates-agenda/a-44758427
Demonstrators march against IMF head Christine Lagarde, who is in Buenos Aires for the G20 Finance Ministers and Central Bank Governors Meeting.
The IMF, which had backed Macri's deregulation, is now bailing Argentina out in exchange for deep cuts in subsidies, revenue sharing, and public works - but no tax increases on the wealthy or curbs on imports or capital flight.
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