The United States is not seeking a trade war over tariffs but does not fear one, US Treasury Secretary Steven Mnuchin said on Tuesday after a meeting of G20 finance ministers.
A trade war “is not our goal, but we are not afraid of it,” Mnuchin said at the end of the two-day meeting in Buenos Aires aimed at averting a crisis sparked by looming US tariffs on steel and aluminium.
“We have to be prepared to act in the US interest to defend free and fair reciprocal trade. In doing that there is always a risk.
“That’s not our goal. But we are not afraid of it,” he said.
Mnuchin was speaking after ministers agreed not to condemn the US move in the meeting’s final statement, but instead spoke of “heightened economic and geopolitical tensions.”
“Downside risks persist and, over the medium term, challenges remain to raise growth and make it more inclusive,” the ministers from the most developed and emerging economies said.
The final communique, approved three days before US trade tariffs on steel and aluminium come into force, comes as the world’s two biggest economies, the US and China, engage in a clash over trade rules, particularly overproduction, in which European and other US allies could sustain collateral damage.
“We sensed a willingness of the Americans to reduce tensions,” French ministry sources said after a meeting on Monday between France’s Finance Minister Bruno Le Maire and Mnuchin.
Le Maire was among several EU ministers to plead for an exemption from the US tariffs, saying the problem was due to China’s overcapacity, not key allies in Europe.
Mnuchin’s veiled threat was echoed by EU Economic and Financial Commissioner Pierre Moscovici, with a statement carrying the same hint of steel in a velvet-gloved hand.
“The EU does not want an escalation on trade, it does not want a trade war, but it is ready to react, even if our preferred option is dialogue,” he said. “Our countermeasures are ready.”
Ministers agreed to delay the search for a solution on touchy subject of taxing the four American tech giants, Google, Amazon, Facebook and Apple.
In their statement, the ministers pledged to “work together to seek a consensus-based solution by 2020,” on the taxation of digital giants. They agreed to provide an update on the situation in 2019.
“This is a positive message: there was no shock at the meeting,” Pascal Saint-Amans, director of the Centre for Tax Policy and Administration at the Organisation for Economic Cooperation and Development.
On the eve of the meeting, Mnuchin had sounded a clear warning that the US “firmly opposes” any new tax aimed at its big tech firms, despite a growing EU resolve to tackle the issue.