US urges G20 to cut trade imbalances, focus on China
The Trump administration urged other G20 countries on Tuesday to do more to protect their domestic industries and job markets from Chinese imports, arguing such distortions were “sucking” much-needed growth out of the global economy.
In more direct comments, German Finance Minister Lars Klingbeil noted that the US-and Israeli-led Iran war, together with ongoing US tariff disputes, were also major causes of uncertainty holding back the global economy.
Uncertainty is poison for economic growth.
“The tariff conflicts being pursued by the US, such as the current dispute with Canada, destroy trust.”
It remains unclear whether the US will be able to bring the diverse forum together to agree on a joint communique on how to reduce global imbalances.
G20 member China has shown little interest in longstanding calls for it to reduce industrial subsidies and rebalance its economy, while its yuan currency remains significantly undervalued by most measures.
Beijing has also exploited its dominance in processing of critical minerals by placing export restrictions on rare earths in April 2025, a response to US President Donald Trump’s tariffs that has also hit non-US companies.
Japanese Finance Minister Satsuki Katayama, speaking at a news briefing on Monday evening after the first day of talks, said she had told her G20 counterparts that arbitrary export restrictions on critical minerals were harming the global economy and should be withdrawn.
Officials said the section on global imbalances in the planned joint communique was proving particularly difficult, with China opposed to any singling out of ‘non-market economies’ or firm words on critical mineral supply curbs.
European countries were also keen to include strong language critical of Russia’s war against Ukraine.
A selloff in global bond markets deepened on Tuesday, with Japan’s 10-year bond yield hitting 3% for the first time since 1996 – the latest manifestation of investor concern about energy-driven inflation, potential monetary tightening and worsening fiscal conditions.