Leaders of the world’s most powerful economies are converging on Hamburg, Germany, for the annual Group of 20 meeting. The summit, as usual, will provide a venue to discuss issues of critical international importance. But setting this year’s agenda apart are the divisions that lately have grabbed the world’s attention thanks largely to US President Donald Trump’s “America First” policies on trade, climate, and security. Competing forces are trying to rebalance the global order, pitting nationalists and globalists against each other. The fight to change, or preserve, the status quo will pervade the G-20 meeting, both during the main event July 7-8 and as world leaders meet one-on-one on the summit’s sidelines.
Trade Atop the Bill
Despite its recent shift toward retrenchment, the United States still occupies a position of power on the world stage and will guide the course of conversation at the G-20. Trade will be a central topic of discussion. As health care and tax reform proposals face congressional and judicial roadblocks, Trump sees trade as a strong fallback option to advance his agenda. The president, after all, has more authority to change US policy over the matter through executive action relative to other domestic issues. A country-by-country review of the United States’ bilateral trade deficits reached Trump’s desk during the week of June 26, and he may soon start planning to try to reduce the imbalances. Washington’s actions to that end will target primarily the other members of the G-20. In 2016, the United States had a combined trade deficit of $667 billion – or 84 percent of its total trade deficit – with its 18 fellow countries in the G-20 (the European Union being the group’s 20th member).
This post was published at FinancialSense on 07/07/2017.