G20 influence needed as further US protectionism could provoke global trade war

By Wang Jiamei Source:Global Times Published: 2017/7/3 21:33:39

It is unknown whether US President Donald Trump will really trigger a global clash with other major economies during the upcoming G20 Summit in Hamburg, especially after the EU, Australia, Russia, China and other economies warned the US against its plan to restrict imports of steel and aluminum at the WTO on Friday. While there is the threat of a global trade war, which would undermine the interests of all parties, it may still be avoided if G20 members can make good use of the G20 platform to strengthen policy coordination and promote global governance.

Tensions have been growing since media reports said that the Trump administration was considering curtailing imports of steel and aluminum by imposing hefty tariffs on the grounds of national security. The final decision is expected to be announced following Trump's meeting with other G20 leaders in Hamburg later this week.

It is not wrong for the Trump administration to pursue an "America first" strategy, but it is wrong to confuse short-term national interests with the long-term interests of the nation and the international community. Failing to recognize the US' fundamental interests will not only go against the trend of globalization, but also undermine the existing global trade order, eventually hurting its own interests. Sun Jiwen, spokesperson with China's Ministry of Commerce, said on Thursday that "national security" is such a broad term that it could easily be abused if there are no clearly defined conditions, which would impede normal international trade flow.

On Friday, WTO members cautioned the US against a tit-for-tat response, as an EU official said the new potential tariff would lead to systemic consequences and that the EU would be "firm in taking all necessary actions" if its exports are curbed, according to a Reuters report. The EU is expected to be the biggest victim of the US tariff plan as China's steel exports to the US are already limited due to various anti-dumping and countervailing actions.

While it remains to be seen what decision the Trump administration will make, major economies should use the upcoming G20 meeting to advance more sensible policy coordination. An effective G20 mechanism will play a crucial role in promoting global economic stability, reducing financial risks and lowering trade barriers. Bolder steps for further improving global governance are needed, especially when there is a looming threat of a global trade war.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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