Differences remain over trade and the tensions could escalate further despite talks by the world's top financial officials taking place in Argentina's capital amid fears that a wave of tariffs could damper global economic growth, a European official said Sunday.
The meeting of G20 finance ministers and central bankers in Buenos Aires comes with the United States and China in a full-blown trade war with both nations imposing tariffs on billions of dollars of each other's goods with even bigger tariffs being threatened.
"These meetings have been taking place in an international context which is very challenging," European financial affairs commissioner Pierre Moscovici told reporters Sunday. "Trade tensions remain high and they threaten to escalate further."
But Moscovici said the two-day summit that began Saturday has not been "tense," and that countries must remain "cool-headed and maintain a proper sense of perspective."
Representing the US at the meetings is Treasury Secretary Steven Mnuchin, who on Saturday said the overall US economy has not been harmed by the trade battles set off by President Donald Trump's get-tough policies.
But he acknowledged that some individual sectors have been hurt and said US officials are looking at ways to help them.
The US and China have hit each other with tariffs on $US34 billion goods with another $US16 billion in penalty tariffs in the pipeline. The Trump administration is preparing to impose tariffs on another $US200 billion and threatening to add $300 billion more to that figure.
Washington has also imposed tariffs of 25 per cent on steel and 10 per cent on aluminium, including from Europe. China, the EU, Canada, Mexico and Turkey have counterpunched with taxes on more than $US24 billion worth of U.S. exports.
"Protectionism, I want to insist on that, is good for no one," Moscovici said. "Trade wars are not easy ... they create no winners, only casualties."
But Moscovici said that the EU remains open to dialogue.
"That's why EU President Jean-Claude Juncker and Eu Trade Commissioner Cecilia Malmstrom will meet with Trump" in Washington D.C. next week, he said. "We hope this meeting will be productive and successful."
Global markets have remained generally calm despite the US-China trade war and the other conflicts ignited by Trump.
But analysts say they expect Trump will impose more tariffs on China and potentially other key US trading partners.
With those nations almost certain to retaliate, the result could be higher prices for Americans, diminished export sales and a weaker US economy by next year.
International Monetary Fund Managing Director Christine Lagarde has said the recent string of tariffs could significantly harm the global economy, lowering growth by about 0.5 per cent "in the worst-case scenario."
Officials in Buenos Aires are also discussing issues including the future of work and infrastructure for development, the international tax system and financial inclusion. It is the third of five meetings by finance ministers and central bankers scheduled in advance of a main G20 meeting in Argentina that will be held Nov. 30-Dec 1.
On Sunday afternoon, participants were still working on the details of a final draft of a resolution from the meeting.
The Group of 20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging economic powers including China, Brazil, India and Argentina.
