On the eve of the G20 Trade Ministers’ Meeting: The United States emphasizes overcapacity investigation

On the eve of the G20 trade ministers’ meeting, U.S. Trade Representative Jamieson Greer convened a roundtable meeting on Tuesday (September 29) to endorse Washington’s trade policy. He said that the government is “not anti-trade.” He told reporters that all countries are facing the challenges of global overcapacity and "non-market policies."

He said he did not want to predict the ongoing "301 investigation." The investigation focuses on overcapacity issues in China and other major trading partners.

Greer said a decision on whether to impose new tariffs would be made after an investigation into industrial overcapacity issues. Here, the Trump administration takes into account the tariff caps agreed with various countries.

High-level trade officials from major G20 economies including China, India, Russia, Japan, Germany and France have arrived in the Midwestern city of Milwaukee (Milwaukee).

Agence France-Presse quoted analysts as saying that the planned two-day meeting may reach a deadlock because Trump's tariff policies have put pressure on all bilateral relations. At the same time, China has dismissed criticism of its exports, which critics say are caused by overcapacity in industry. At the G20 finance ministers and central bank governors meeting in North Carolina in early September, all G20 members except China agreed to take action against overcapacity and cheap export policies. The meeting failed to issue a joint communique and only issued a presidential statement.

After a roundtable with business executives and trade ministers, Greer said in response to concerns about the EU, Japan and South Korea, "I don't want to comment before the report is released and the proposed actions are introduced, but I can say with certainty that we take these trade agreements seriously and will take them into consideration when we look at the results of the report."

Greer also told reporters: "I would like to point out that during the implementation process of many such agreements, they have actually alleviated to a large extent the impact of possible overcapacity in the relevant countries."

The Trump administration plans to take advantage of this year's rotating presidency of the G20 Summit to draw attention to China's overcapacity and overreliance on exports for economic growth.

U.S. investigation targets exceed those of China

The EU, Japan and South Korea are among the 16 countries under investigation for "overcapacity". "Overcapacity" is often a charge leveled at China, which critics say floods the market and unfairly drives down prices. However, the targets of the ongoing U.S. investigation have gone beyond China. G20 countries such as the European Union, Japan and South Korea are all threatened by more tariffs.

The Office of the U.S. Trade Representative pointed out that the EU has a huge trade surplus with the United States, especially Germany in the chemical industry, machinery and automobile fields, and Ireland has a huge surplus in the pharmaceutical field, and these may be regarded as evidence of overcapacity.

The trade agreement previously reached by the European Union, Japan and South Korea with the Trump administration set the upper limit of tariffs imposed on the United States at 15% when importing goods from the above countries, and basically eliminated tariffs on American industrial products. When asked whether the United States would abide by these tariff agreements, Greer once said, "A deal is a deal." Previously, the US Supreme Court overturned Trump's sweeping global tariffs implemented under the national emergency law. Subsequently, Washington launched an investigation into overcapacity.

Maros Sefcovic, the EU Commissioner for Trade Affairs, said at a roundtable meeting on Tuesday (September 29) that he welcomed the Trump administration’s attention and commitment to solving the problem of industrial overcapacity. He informed that the EU is promoting reforms on overcapacity issues within the G20 framework and the World Trade Organization.