G-20 Finance Ministers Meet in North Carolina to Discuss Iran Sanctions and Global Growth

A MARTÍNEZ, HOST:

Finance ministers from the world's biggest economies are gathered in the mountains of North Carolina this week.

LEILA FADEL, HOST:

They're talking about how to encourage faster economic growth while also putting the squeeze on the economy of Iran. It's the first time the U.S. has played host to the G-20 summit in more than a decade and a half.

MARTÍNEZ: NPR's Scott Horsley has been monitoring the talks. Scott, Treasury Secretary Scott Bessent is pushing other members of the G-20 to join the U.S. in tightening the screws on Iran. How's it going for him so far?

SCOTT HORSLEY, BYLINE: It's a mixed bag, A. So far, the U.S. has been unable to force Iran to reopen the Strait of Hormuz using military force. So last week, the administration announced what it's calling Operation Economic Outcast to sever Tehran's remaining links to the global economy. 'Course, Iran itself is already heavily sanctioned, but now the U.S. is threatening to punish other countries that do business with Iran.

At the G-20 summit, Treasury Secretary Bessent said he was pleased to get enthusiastic backing for the effort from the European Union. But, you know, Josh Lipsky, who's senior director of the GeoEconomics Center at the Atlantic Council, says it's not really the EU Bessent needs to win over.

JOSH LIPSKY: You have the U.S. going to the G-20 and sitting across the table from countries like China and Turkey, which are economic lifelines for Iran, and asking them to crack down. And the question across that table is, how serious are you about those threats? China does not feel that the U.S. is incredibly serious about those threats right now.

HORSLEY: Meanwhile, the U.S. and its allies are paying a price for the ongoing stalemate with Iran. Gas prices here at home are still more than $1 a gallon higher than they were before the war began, and diesel prices are almost $2 higher.

MARTÍNEZ: So this meeting, Scott, is supposed to promote economic growth around the world. How does the U.S. propose to do just that?

HORSLEY: Deregulation, oil and gas production and cutting taxes. 'Course, the GOP tax cuts last year have added to the U.S. federal debt, which topped $40 trillion a couple of weeks ago, and that's forcing the U.S. to borrow money from investors around the world. But Bessent insists there is a simple solution.

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SCOTT BESSENT: The world is awash in debt, and the only way for us to get out of this is to grow our way out of this.

HORSLEY: Now, fiscal watchdogs acknowledge that growth is part of the solution, but they are doubtful that it's some kind of magic elixir. Federal debt in the U.S. is growing about three times as fast as the overall economy right now, and just paying interest on that debt is consuming more than a quarter of all government revenue.

MARTÍNEZ: So I saw that Russia's finance minister showed up at this week's meeting, which was a bit of a shock. Tell us more about that.

HORSLEY: Yeah. This was the first time Russia's been represented in person at a G-20 finance meeting since the country invaded Ukraine more than four years ago, and European ministers at the meeting protested. They refused to take part in the traditional family photo until the Russian finance minister bowed out. Bessent, however, appeared to have no such qualms. Meanwhile, of course, the U.S. is in a bitter trade spat with our next.door neighbor, Canada, whose finance minister is also in North Carolina. Lipsky says it's a curious backdrop when the U.S. is calling for global cooperation against Iran.

LIPSKY: The whole reason the U.S. was able to stand up the G-20 in the first place is because the world needed and wanted U.S. economic leadership. They needed it to stabilize the global economy. The question some countries are asking at the moment is - is the U.S. a source of stability or instability in the global economy?

HORSLEY: As the premier of British Columbia said this summer, if you're picking fights with Canada, you don't have a friend in the world.

MARTÍNEZ: That's NPR's Scott Horsley. Scott, thanks.

HORSLEY: You're welcome.

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