G20 trade ministers begin talks in Milwaukee under pressure from US tariffs

The G20 trade ministers are due to begin discussions this Wednesday, September 30, under the aegis of the Americans who are hitting them with customs duties, accusing them of turning a blind eye to forced labor or even distorting global competition. This year, Washington is the organizer of a series of G20 meetings, which brings together the major world economies (China, India, Japan, France, Russia, etc.).

The meeting dedicated to trade issues is scheduled to last two days in the city of Milwaukee (Wisconsin, northern United States), not far from the border with Canada, one of the favored targets of the trade war led by President Donald Trump. Analysts expect the summit to produce a mousetrap: the customs duties put in place by Donald Trump have upset other countries, and China denies maintaining overcapacity which benefits its exports and pulls global prices down.

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“We shouldn't expect breakthroughs in Milwaukee,” says Josh Lipsky of the Atlantic Council think tank, emphasizing Donald Trump's preference for bilateral negotiations. Even if the G20 partners will be keen to find ways to cooperate with the world's largest economy, "they will also be keen to express their concerns about customs duties", underlines Wendy Cutler, vice-president of the American organization Asia Society Policy Institute. The American Trade Representative, Jamieson Greer, for his part affirmed that American policy “was not anti-trade” during a round table in Milwaukee on Tuesday.

Commercial tug of war

Since his return to power, Donald Trump has launched a vast protectionist offensive based on increasing customs duties on products imported into the United States. The Supreme Court in February censured the widespread surcharges he had imposed on countries around the world. Its sectoral customs duties (targeting automobiles, steel or construction timber), on the other hand, have remained in place. The American executive partially replaced the canceled customs duties by introducing a new tax (of 10% or 12.5%) against around sixty trading partners accused of not sufficiently combating forced labor. China, India and the European Union (EU) - all members of the G20 - are concerned.

The threat of additional customs tariffs, this time based on the question of “industrial overcapacity”, looms large. These terms generally refer to Chinese competition, but the Americans also point to the EU, Japan and even South Korea. Wendy Cutler expects that certain countries, which consider themselves “unfairly targeted”, “will not mince their words” on this subject. According to her, China will seek to present itself as serving the general interest through the provision of high-quality products at low prices. More broadly, thinks Josh Lipsky, the members of the G20 “wonder to what extent they must deal with the Trump government, given that trade policy could change in the United States after 2028” and the end of the Republican billionaire's mandate.

On the sidelines of the G20, workers and activists criticized the American executive for not having improved the situation of workers, farmers and small businesses as promised. John Drew, head of the United Auto Workers union in Wisconsin, laments the loss of manufacturing jobs in the Midwest state over the decades. According to him, “customs duties have done nothing to bring back jobs and rebuild industrial production.”