Australian Treasurer Says Trump Has a Point on Trade: G-20 Update

(Bloomberg) -- This weekend’s meeting of G-20 finance ministers and central bankers in Buenos Aires comes at a critical time for the global economy, as trade tensions threaten to undermine the fastest growth in seven years.

Policy makers are meeting after U.S. President Donald Trump on Friday accused Beijing and the European Union of gaming their currencies to boost exports while threatening to slap tariffs on almost all imports from China. He also attacked the U.S. Federal Reserve for raising interest rates. G-20 members now have the difficult task of agreeing on a final communique that can provide an assessment of the global economy and offer sweeping, multilateral policy recommendations.

Here are the latest developments from the meetings, updated throughout the day. (Time-stamps are local time in Buenos Aires).

SUNDAY

Australia Says Trump Has a Point on Trade (10:16 a.m.)

By Walter Brandimarte
Trump’s unconventional measures on tariffs reflect years of grievances but ultimately aim at ensuring free and open trade, according to Australia’s Treasurer Scott Morrison.

“The tit-for-tat announcements on tariffs were an unconventional way to resolve those issues,” he said in an interview, adding: “There is legitimate frustration about the failure of the system to resolve the issues that concern the U.S. and others.”

Canada’s Morneau Says FX Not Under Discussion (8:24 a.m.)

By Theophilos Argitis
Canadian Finance Minister Bill Morneau said G-20 ministers didn’t get into the currency concerns raised by Trump in the first day of talks, and he doesn’t expect they will be brought up for discussion on Sunday.

Speaking in an interview with Bloomberg, Morneau said trade was “obviously” one of the main areas of discussion though little progress was made.

“I wouldn’t say that we can argue that we made progress, but I think that we can clearly say that there is a sense we need to keep working to make progress,” he said.

SATURDAY

Draft Says Growth Less Synchronized (9:23 p.m.)

By Raymond Colitt
Global economic growth is less synchronized and faces increasing threats, including from trade tensions, according to a draft statement of the final G-20 communique.

“Downside risks over the short and medium term have increased,” according to the document. A final version of the statement will be published on Sunday.

Japan’s Aso Calls for Fair, Rule-Based Trade (9:20 p.m.)

By Paul Jackson
Protectionist measures don’t benefit anyone, as it’s important to have fair, rules-based trade, Japan’s Finance Minister Taro Aso told reporters.

He added that recurring trade imbalances should be addressed at a multilateral level, in a possible swipe at Trump’s go-it-alone policies.

France Urges U.S. to ‘Return to Reason’ on Trade (6:05 p.m.)

By Catherine Bosley
The U.S. must “return to reason” and rescind its tariffs on steel and aluminum imports before European countries discuss overhauling aspects of global trade, according to France’s finance minister.

“We refuse to negotiate with a gun to the head,” Bruno Le Maire told reporters. “First of all we need the withdrawal of those tariffs before entering into any kind of discussion and negotiation” on matters such as international property or the World Trade Organization.

Should the U.S. impose any additional tariffs, “we won’t have any other choice but to retaliate once again,” Le Maire said.

Brazil’s Guardia Says Global Risks Increased (5:45 p.m.)

By Walter Brandimarte
Global economic threats are undeniably on the rise, with emerging markets facing the biggest risks, Brazil’s Finance Minister Eduardo Guardia said.

Threats include rising trade tensions, tightening monetary policy in the U.S. and geopolitical issues, Guardia told reporters, echoing language from the March G-20 statement.

“We have the perception that these risks have grown since the last meeting,” he said. “Countries need to advance the process of economic reforms to build up their defenses.”

G-20 participants are working to produce a communique on Sunday that clearly expresses those concerns, the minister said, adding he doesn’t foresee any trouble negotiating the language with the U.S.

Kuroda Says Strong Dollar Signals Economic Vigor (12:17 p.m.)

By Paul Jackson
Bank of Japan Governor Haruhiko Kuroda, weighing in on the debate about currency wars, said it’s desirable that exchange rates reflect economic fundamentals.

U.S. interest rates are likely to keep rising and the dollar is expected to gain as a result, reflecting the strength of the U.S. economy, Kuroda told reporters. The normalization of U.S. monetary policy stems from growth in the economy and rising prices, he added.

“For the U.S. economy and the global economy, that is not a negative,” he said.

S. Africa: Central Bank Independence Sacrosanct (12:04 p.m.)

By Patrick Gillespie
South African Central Bank Deputy Governor Daniel Mminele joined a growing chorus of finance and central bank officials pushing back on U.S. President Donald Trump’s comments on trade and central banks.

“Central bank independence is absolutely sacrosanct in my view and there is ample evidence that independent central banks tend to be more successful,” Mminele said, in response to a question on Trump’s criticism of the Federal Reserve. He declined to specifically comment on Trump’s tweets about the Fed.

Lagarde Supports Central Bank Independence (10:25 a.m.)

By Patrick Gillespie
International Monetary Fund Managing Director Christine Lagarde said Saturday she values the independence of central banks and added that current U.S. tariffs would have a negative impact on global growth.

When asked about U.S. President Donald Trump’s criticism of the Federal Reserve, Lagarde said “we always value the independence of central banks.”

“Independence is key,” Lagarde said in Buenos Aires at the G-20 meeting of finance ministers and central bank chiefs.

Germany’s Scholz Says EU Not Using FX For Trade (10:02 a.m.)

By Carolynn Look
Germany’s Finance Minister Olaf Scholz rejected President Donald Trump’s allegations that the EU was keeping its currency weak to gain trade benefits.

“The European Union carries out very rational politics, which are not geared at artificially creating economic successes through currency levels,” Scholz told reporters in Buenos Aires.

To contact Bloomberg News staff for this story: Walter Brandimarte in Buenos Aires at wbrandimarte@bloomberg.net

©2018 Bloomberg L.P.

With assistance from Editorial Board