Is the world facing an all-out trade war?

Attempts by the G20 finance ministers to agree on committing to free trade and to fighting protectionism have failed due to resistance. US Treasury Secretary Mnuchin was able to impose President Trump's line at the G20 summit in Baden-Baden. Whether the conflict will turn into a trade war depends on how the other G20 members - and in particular Germany - react, commentators conclude.

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Financial Times (GB) /

Meet provocation with patience

Instead of seeking direct confrontation with the US administration the other G20 members should wait and see if some problems won't resolve themselves, the Financial Times advises:

“America's trading partners can react to each actual policy as and when it emerges rather than getting involved in general public fights over principle. The plan for a border adjustment tax on US imports, for example, which has alarmed foreign governments, is already snarled up amid disagreements within and between the White House and Congress without outside interference. Incidents like the G20 communiqué change should keep other countries on high alert. Yet they would do well to pick their battles and see exactly what emerges from the Trump administration before they engage in what may well be a long and fraught campaign to keep the world trading system open.”

Le Monde (FR) /

German trade surplus must be reduced

Whether Europe can sucessfully defy US isolationism depends largely on Germany, Le Monde stresses:

“Germany's trade surplus is exorbitant: 270 billion euros, or 8.5 percent of its GDP. ... For years the Germans have turned a deaf ear to such reproaches. Their surplus has grown thanks to the policies of the European Central Bank, which devalued the euro to revive the European economy. Stimulating growth remains the priority, also for the Americans. ... The Germans must seriously tackle their trade imbalance by raising salaries and reinvesting surpluses in partner countries. This is, we admit, a delicate undertaking. Nonetheless it is vital in the joint effort to counter America's isolationist inclinations and put the defence of global trade back on the agenda.”

La Repubblica (IT) /

America first incompatible with old world order

The G20 summit is the first victim of Trump's economic nationalism, La Repubblica observes:

“It's clear what this America doesn't want and what the core of Trumpism, its non-negotiable element, is: economic nationalism. Many had hoped that Mnuchin would act more like a banker than a politician. But this is not the case. His loyalty to the president is unshakeable. The message brought to Germany by the US Secretary of the Treasury is identical to that conveyed to Merkel by Trump just a few hours earlier: you tricked us, now we make the rules. If 'America first', the slogan of Trumpist nationalism, is not reconcilable with the multilateral approach of the G20 and global governance, then the two can go to hell as far as Trump is concerned.”

NRC Handelsblad (NL) /

G20 feel icy wind blowing from the US

It is a bad omen that for the first time the final declaration of the G20 summit does not contain an avowal against protectionism, NRC Handelsblad warns:

“The finance ministers and central bankers of the other G20 states can feel the new wind blowing from Trump's Washington. And it is a cold one. … Germany, the host of the G20, had a second close encounter with the confrontational stance of the new team in Washington this weekend. Chancellor Merkel's visit to President Trump on Friday was already very unpleasant. In Trump's simplified vision of trade - in which one country's loss is another country's gain - Germany is playing a fundamentally false game with its trade surplus. The question now is whether the Trump administration will leave it at that - i.e. words, or rather the lack of them - or take things further.”