US Supports Fair Trade But Rejects Ban on Protectionism

But Steven Mnuchin could not be moved.

The lack of an explicit rejection of protectionism at the meeting, unlike in previous communiques, has been criticised by members such as France and Germany, whose finance minister, Wolfgang Schauble, lamented that the fight against protectionism “means different things” to different countries. The U.S. economy is the world’s largest, and changes in the way it buys and sells goods have global ramifications.

The United States wanted to include explicit language that ensured “fair trade” between the nations, but was unable to get that included in the official communique, according to Bloomberg.

For Washington, the watered-down language that emerged in their communiqué ensures the USA can still use sanctions or other policy tools to punish trade partners and thwart economic policies the Trump administration believes to be unfair.

“What is relevant is what we agreed as a group: to strengthen the contributions of trade to our economies”, he said.

They made the remarks on March 17 at the BRICS summit for finance ministers and central bankers held in Germany’s southwestern city of Baden-Baden. Britain’s approach to this new environment will be crucial.

The Finance Minister of host Germany, Wolfgang Schauble, said for his part that the negotiations were very hard but that a door had been left open for future talks.

This was replaced with a watered-down pledge to “strengthen the contribution of trade to our economies” – language viewed by some participants as preserving USA flexibility on trade policy.

Mr Trump has made his position clear on what this work would involve.

He said trade deals need to offer a “win-win situation”.

Asked about this, Mnuchin said he knows Trump’s desires on trade and negotiated them from Baden Baden, adding: “the new language makes sense”. In his campaign to become president and since his inauguration, Donald Trump has sounded more protectionist than his predecessors.

There is still hope among advocates of free-trade that moderate voices in the Trump administration will gain influence.

Chinese premier Xi Jinping’s delivered a startling speech in which he staunchly defended globalisation during the World Economic Forum in Davos on February.

“The weak wording on trade is a defeat for the German G20 presidency”, Ifo economist Gabriel Felbermayr said.