Trump Wins: G-20 Drops 'Anti-Protectionist, Free-Trade, & Climate-Change Funding' Pledge

Tyler Durden's picture

After delays and hours of discussions amid tensions over 'trade' comments between the United States and the rest of The G-20, it appears President Trump has 'won'. While China was "adamantly against" protectionism, the finance ministers end talks without renewing their long-standing commitment to free trade and rejection of protectionism after US opposition.

The world's financial leaders are unlikely to endorse free trade and reject protectionism in their communique on Saturday because they have been unable to find a wording that would suit a more protectionist United States, G20 officials said.

This would break with a decade-old tradition among the finance ministers and central bankers of the world's 20 top economies (G20), who over the years have repeatedly rejected protectionism and endorsed free trade.

But the new administration in the United States is considering trade measures to curb imports with a border tax and would not agree to repeat the formulations used by previous G20 communiques, clashing with China and Europe, the officials said.

"Unless there is a last minute miracle, there is no agreement on trade," one official, who declined to be named, told Reuters.  "This is not a good outcome of the meeting," a G20 delegate quoted Bundesbank President Jens Weidmann as saying.

In a partial face-saving move, as The FT details, G20 finance ministers meeting in the German resort town of Baden-Baden noted the importance of trade to the global economy, but dropped tougher language from last year that vowed to “resist all forms of protectionism”.

The new communique said: “We are working to strengthen the contribution of trade to our economies. We will strive to reduce excessive global imbalances, promote greater inclusiveness and fairness and reduce inequality in our pursuit of economic growth.”

 

The watered-down commitments on free trade reflected the anti-globalisation mood that Donald Trump has brought to Washington and came in the first G20 meetings between Steven Mnuchin, the new US Treasury Secretary, and his foreign counterparts.

US Treasury Secretary Mnuchin spoke to reporters after the meeting:

  • *MNUCHIN: LOOKING FORWARD TO WORKING CLOSELY W/ G-20 COLLEAGUES
  • *MNUCHIN: CONFIDENT U.S. CAN WORK CONSTRUCTIVELY WITH PARTNERS
  • *MNUCHIN: U.S. BELIEVES IN FREE, BALANCED TRADE
  • *MNUCHIN SAYS WILL LOOK AT TRADE SURPLUSES WITH VIEW TO CORRECT
  • *MNUCHIN SAYS MULTILATERAL AGREEMENTS HAVE VERY IMPORTANT PLACE
  • *MNUCHIN SAYS U.S. WANTS TO RE-EXAMINE TRADE DEALS INCL. NAFTA
  • *MNUCHIN: U.S. BELIEVES IN APPROPRIATE REGULATION
  • *MNUCHIN SAYS IMPORTANT BANKS CAN PROVIDE LIQUIDITY IN MARKETS

Reuters also points out another potential win for Trump as the communique will also drop a reference, used by the G20 last year, on the readiness to finance climate change as agreed in Paris in 2015 because of opposition from the United States and Saudi Arabia.

Trump has called global warming a "hoax" concocted by China to hurt U.S. industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions.

 

Trump's administration on Thursday proposed a 31 percent cut to the Environmental Protection Agency's budget as the White House seeks to eliminate climate change programs and trim initiatives to protect air and water quality.

 

Asked about climate change funding, Mick Mulvaney, Trump's budget director, said on Thursday, "We consider that to be a waste of money."

The G20 do agree, however, to show continuity in their foreign exchange policies, using phrases from the past on foreign exchange markets.

As we noted earlier, needless to say, such an acrimonous end to the weekend's summit would likely result in a surge in FX volatility when markets open for trading late on Sunday, reflecting the new state of global trade flux, in which the future of the US Dollar is completely unknown, and reflecting the emerging chaos over the future parameters of trade.
 

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merizobeach's picture

"With a Euro worth 2 dollars"

Eurozone exports would be cheap, too!  Gosh, why didn't they think of that?

greenskeeper carl's picture

This guy is a simpleton, and seems to think this would happen in a vacuum with no other consequences. You the the Germans want that kind of move? Not gonna happen.

Quantum Bunk's picture

hahaha now he's a Keynesian

Euro went from .80 to 1.50 and exports surged

MEFOBILLS's picture

You guys throw around the term Keynisan as if it is an epithet.  It is a trigger word, and used wrongly.

All Keynes did was to define the debt money system.  At the time the world was in a great depression,  Keynes explained how the debt system goes through collapse phases, and how to avoid them with counterspending.

That others have twisted his words and meanings is not Keynes fault.

 

Quantum Bunk's picture

hahaha now he's a Keynesian

Euro went from .80 to 1.50 and exports surged

froze25's picture

The EU isn't a nation state, if all nations of the EU are added together you may be right. 

Lonesome Crow's picture

"...Do you think this is untrue ? Ha !"

...now missed the point twice.

Quantum Bunk's picture

 

Funny how quickly Zerohedge commenters become modern monetary theorists when they are confronted with the fact that the US is a debt slave to the EU

Lonesome Crow's picture

Strike three, unless you have a question.

TheLastTrump's picture

Bbbbbbut.....NATO still needs to pay what they agreed to pay, wouldn't you agree?

 

If not, why not? Dropped on head at birth? Standing behind the door when GOD was passing out brains? Early childhood tropical disease where your brains liquefied & ran out your ears?

HowdyDoody's picture

Why should anyone pay more to the North American Terrorist Organisation?

JekyllIsland's picture

Quantum or Dickhead you choose

 

Even CNN reports that the foreignors only hold about 32% of US debt...the largest holders are local and state governments, then unions...assholes like you should get cancer

MEFOBILLS's picture

Hudson who is a professor at UMKC, the home of MMT, talks about debt cancellation.

Debt instruments that accumulate unnaturally need to be cancelled.  The U.S. is not a debt slave to the EU, it can cancel the debts anytime.  

Also, the debt instruments, are TBills, and are denominated in DOLLARS.  

MMT also teaches that a sovereign issuer of its own money, can issue that money to cancel the debts.  

MMT is confused on the nature of exogenous and endogenous money, claiming that the U.S. government is exogenous, when it is not.  The U.S. uses endogenous Federal Reserve banking notes as its money of the realm....not U.S. Dollars.

Rebel yell's picture

Funny how you say EU because the union will be disbanded very soon.

Lonesome Crow's picture

Could have been but not if QB is held to the original error.

Quantum Bunk's picture

Im right. You are wrong.

The EU lends a trillion to the US. A direct subsidy to the military

A Man of Wealth and Taste's picture

Well considering how many treasuries Belgium has been purchasing since 2008, of course Europe is the largest holder. Treasuries purchased by the proceeds of chocolate sales.

/sarc (though this shouldn't be necessary)

Teja's picture

Please, no curses here. According to Douglas Adams, "B....m" is the worst expletive in the universe, and all reasonable people looking down to earthlings because we regularly use it.

MEFOBILLS's picture

You have to educate the ZH crowd, many are not aware of Belgium gambit.  

Basically,  Belgium had an excess of dollars to buy TBills.  Somehow they got these dollars in excess of the ability of their economy to acquire.

I often mention the need for a bancor trading system, and this is a good example.  Finance runs gambits and can issue dollars outside of the trading system.  Who knows how Belgium was able to buy so many TBills. 

The main thing is "who benefits."  The U.S. benefited by TBill purchases which prevented a bond collapse.

Belgium is a country that is product of U.S. interference (kept alive WW2).  It also houses EU government institutions.

Vageling's picture

Amazing what a non country can do! They even survive having no official gubie. My point? They're not stoopid but fragmented. Even the EU members are deep in the banksters la-la land. SOP.

Quantum Bunk's picture

Yes. The Bancor was the only thing that Keynes had right. The USSR, France and the UK supported it I believe. But the US wnated hegemony and hegemony they got. The US has been robbing the world blind ever since.

jughead's picture

Idiot...last time I checked, less than a year ago, the top holder of US devt by far are U.S. citizens and American entities, such as state and local governments, pension funds, mutual funds, and the Federal Reserve. Together they own the vast majority -- 67.5% -- of the debt. I really could give a shit which shithole country holds the largest share of the remaining 32.5 %.  

Quantum Bunk's picture

The treasuries that the Fed bought dont count. How could you not know that ? Cash is the Feds liability.

MEFOBILLS's picture

This is correct.  The FED owning U.S. T Bills is like your left pocket owing your right pocket.  After the FED takes its cut, and pays off its banks, it rebates interest to the Treasury.  This has been going on since Wright Pattman.

Private debts matter the most.  Then debts owned to foreigners.

In the U.S., all its debts are denominated in dollars - not in foreign currency.

I notice that nobody breaks down debt into type, and make the fatal assumption that all debts are the same, and that all debts must be paid.

ds's picture

Yes. Debts are not the same. the economy has internal and/or external debts. It can be sliced further into private sector and public sector debt. Most of the economic spins ofthen do not understand these distinctions. Until you are sure that they know what debt they are taling about, do not even bother to debate their prognostications.

Yes. Private debts matter the most for the here and now. Read Steve Keen for a good grasp of the implications of private debt on today's global economy in which US is a major component. 

 

TheLastTrump's picture

Japan, China & the US are in the top 3 holders of US debt...with the US being #1 last I checked....

 

YOU'RE FAKE NEWS FUCK OFF

MEFOBILLS's picture

There are a lot of TBills held in offshore centers, like Panama.

TBills held in Delaware banks are recyled offshore dollars, to then buy Debt instruments.  In other words, on-shore banking recycles dollars from criminal world wide enterprise.  Off shore banking countries like Panama are havens to take profits in dollars, and avoid paying income taxes.

BigJim's picture

Sorry dude, that's not how it works.

Back at the height of the GFC, the Fed opened liquidity windows worth tens of trillions of dollars to foreign central banks so that the commercial banks in their currency rings could meet their USD obligations. And most of those banks were in... the EU.

European UST purchases are a quid pro quo. Sell USTs? Sure, go ahead... and we'll close those windows and collapse your entire banking systems.

The CBs involved are in cahoots anyways, so it's all academic :-)

Quantum Bunk's picture

Fed primary dealers (like MF Global) are the dollar systems problem. Greek default is a Fed problem. Not an ECB problem. Hence why the ECB just sat there and forced the Fed to print

MEFOBILLS's picture

 Hence why the ECB just sat there and forced the Fed to print

 

No, the Treaty of Lisbon does not allow the ECB to bail out governments.  The Euro was malformed from the beginning.

The true nature of money is law, and the law needs to be changed.

The GREEK IMF loan, ran through the greek economy in one day or less, and then went on to pay off mostly Germany creditors.

American's always hold the top spot at World Bank, while IMF is usually an European - like Christine LaGarde.

Quantum Bunk's picture

As with the gold standard, what is right with the Euro (Lisbon treaty) is what is wrong with the Euro (Lisbon treaty)

MEFOBILLS's picture

and we'll close those windows and collapse your entire banking systems.

 

The Euro system will collapse simultaneously.  Eurodollars are still used to consumate large trades.  These dollars are hypothecated in off shore (in Europe) banks, and serve European needs.

The dollar isn't really U.S. money.  It is private banking cartel money.  The Federal Reserve note does not say U.S. DOLLAR anywhere on it, now does it?

The U.S. lost its sovereignty when it became a golem for the banks.  Yes, the U.S. govenment could tell the banks to sod off, but that is unlikely.

Both the U.S. and Europe are trapped.

www.sovereignmoney.eu

shovelhead's picture

So we'll pay back the rest of the bonds after the costs have been met.

Ok, thats fine too. No prob.

Yaspar's picture

"Seppos"?   LOL.  Have another drink, Limey.

kw2012's picture

Sorry, but we have to pay your investment back plus interest which is better than what EU countries offer. If you want to release us from our obligation then you can say rhe EU financed the war. BTW the US saved the EU in 2008.

TheGardener's picture

Fuck trade. Leave it to the jews if it ever resumes if you think it is worth it , but by all means stop it whole sale and for good.

No need to drag goods over borders, if there is a real market and as dire a need as if  to justify custom exercises , it would already be well served as contraband or a fully legalised variety thereof. No need for free trade. Just freaking stop it Trump once and for all and see all those great traitors trading against America off in jail.

 

 

Timofei's picture

On the contrary:

  1. The interest payments on US debt are not enough to even barely offset the cost of defending Europe, and;
  2. The EU benefits greatly from investing in the US, which has the most stable economy in the world.  They didn't do it out a sense of paying for the defense, but out of self-preservation.
Quantum Bunk's picture

MMT is a no go zone for me. So no.

TheGardener's picture

Good riddance of international double speak. "Free trade" being the least of it.

Al Tinfoil's picture

Dear Quantum Bunk

How much of the EU's holdings of US Debt comes from vendor financing of exports to the USA? 

It seems to be like Germany's positive Target 2 balances - the result of trade surpluses run up at the expense of other EU nations.  No wonder Germany is so "pro Free Trade" and so against debt relief from the ECB to the EU nations that are running Target 2 negative balances from trade deficits with Germany.

The USA under Trump is no longer content to run large trade deficits with the rest of the World, including the EU, while the US continues to pay a disporportionate share of funding for NATO, the United Nations, the IMF, and other international organizations, and guaranteeing the defence of Israel, Saudi Arabia, South Korea, Japan, etc.

jughead's picture

uh, moron, the TOP holder of US debt are American citizens...so please go fuck yourself along with your misplaced perception that you are smarter than one of my turds. 

Quantum Bunk's picture

You are one of the dumbest people ever to grace ZH if you think that the Fed counts as an Amereican UST holder.

https://gefira.org/en/2017/01/24/eu-not-china-or-japan-is-the-biggest-us...

fbazzrea's picture

THE EU IS A TOP 2 HOLDER OF US DEBT TRASH. SO IT HAS BEEN PAYING FOR ITS DEFENCE ALL ALONG.

or... they could buy their own debt trash with negative interest rates. their choice.

Gary Jue's picture

Quantum Bunk..  

Does The Eu's US Treasury Holdings amout to more than the EU Bank Bailouts fron the US Fed that was monitiezed and put upon the US Tax Payer..? Why Dont we just call it quits.. And let the EU defend themselve from here on out.. You Nazis think America owes you something.. The Globalist Establishment is in its final hour.. No more American Tax payer dollars for the UN.. NATO.. We are A Soveriegn Nation State and as such the Globalist Ideaology does not align with our interests..

 

 

Quantum Bunk's picture

ECB forced the Fed to print dollars.

Quantum Bunk's picture

ECB forced the Fed to print dollars.

FIAT CON's picture

Fools part with their money.