Tense times for international trade. G20 Finance Ministers encourage nations to bury the hatchet.
What: G20 Finance Ministers and Central Bank Governors Meeting
When: June 8-9, 2019 in Fukuoka, Japan
Top Concern: The “intensifying” global trade and geopolitical tensions. US-China rift is particularly worrisome. (G20 communique / IMF summary)
“The principal threat stems from continuing trade tensions. The first priority should be to resolve the current trade tensions.”
- Christine Lagarde, managing director, International Monetary Fund (IMF), discussing the importance of modernizing international trading rules.
- US Treasury Secretary Steve Mnuchin said that Trump has not decided whether to impose 25 percent tariffs on additional categories of imports from China.
Impact on Global Trade Growth
IMF Outlook: Growth is expected to improve this year, but the US-China trade war could shave 0.5 percent from global GDP output in 2020.
G20 Finance Ministers Summit Communique: Growth for this year and next is projected to be low and risks ‘remain tilted to the downside’.
Key Trade Issues
- Agreement to compile common rules by 2020 to close loopholes tech giants (Facebook, Google, and others) use to reduce corporate taxes.
- How to adapt tax systems and regulations as business becomes more digitally based.
- The need for stable infrastructure development.
- Concerns that China’s Belt and Road initiative is piling debt on poor countries - who won’t be able to repay.