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Trump's Steel Wild Card Hangs Over G-20 / Trump Pushing America First Prompts G-20 Deadlock on Free Trade

Burgess COMMENTARY

Peter Burgess

Photographer: Krisztian Bocsi/Bloomberg Trump's Steel Wild Card Hangs Over G-20 By Josh Wingrove , Arne Delfs , and John Follain July 7, 2017, 3:04 PM EDT U.S. said to tell Canada any steel measures won’t hit country Merkel seeks G-20 steel solution to avoid ’bilateral actions’

At Donald Trump’s last global summit, climate policy was his wild card -- he threatened to quit the Paris Agreement while other leaders sought a united front on the environment.

This time around, leaders signaled that steel is a sticking point.

Trump’s looming decision on punitive steel tariffs hangs in the air as Group of 20 leaders meet in Hamburg with trade among the most divisive issues. Attendees include the U.S. president and China’s Xi Jinping, whose country has long been the target of steel dumping complaints. As the meeting’s first day wrapped up, leaders indicated that steel remains one of the hottest subjects of debate.

'There is a chance to solve the topic of steel overproduction multilaterally, that is within the G-20 group,' German Chancellor Angela Merkel said on Friday at the summit, urging fellow leaders to find a common solution to steel overproduction. Otherwise, the risk of 'bilateral actions' increases, Merkel said. Italian Prime Minister Paolo Gentiloni said steel “is a key question and an open one.'

Trump’s administration is weighing whether to impose tariffs, quotas or a combination of both on steel imports under national security grounds through Section 232 of the Trade Expansion Act, even though only a fraction of U.S. steel is used for defense. Trump’s Commerce Department launched its review in April, missed a self-imposed deadline for a decision last month and is expected to announce a verdict soon.

Allies Affected

The investigation is peculiar in that the top providers of steel to the U.S. are allies, led by Canada, both the U.S.’s top importer and exporter of steel. Any penalties could have a ripple effect on other trading partners and allies such as Germany, Japan, Russia, South Korea and Mexico, all major steel exporters to the U.S.

Prime Minister Justin Trudeau’s government has been privately assured by the U.S. that Canada won’t be affected by any steel measures, according to a Canadian government official, who spoke on condition of anonymity as Trump weighs his next move. Trudeau has said it’s unlikely Canada will be affected.

The tension over steel evokes the confrontations at the Group of Seven summit in May, where leaders haggled over climate policy before eventually settling on a six-against-one stance with Trump as the outlier. Days afterward, Trump announced he’d yank the U.S. out of the Paris climate accord.

‘Terrified’

'It’s a hard issue and it can be a very provocative issue,' said Thomas Bernes, a former International Monetary Fund and World Bank official who is now a fellow at the Centre for International Governance Innovation based in Waterloo, Ontario.

European countries would prefer a multilateral solution on steel, he said. 'Everyone is terrified' that any U.S. measures on steel 'would be a unilateral action and would open up the floodgates for other countries to do the same,' he said.

At last year’s G-20 summit in Hanghzou, China, leaders agreed that 'structural problems including excess capacity in some industries' was hampering trade and employment, specifically citing steel. It created a Global Forum on excess steel capacity and called for more information sharing, to be facilitated by the OECD.

Several G-20 leaders criticized that the new global forum was working too slowly, Merkel said Friday. She said she’s seeking to find a solution by the time the G-20 ends on Saturday.
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Trump Pushing America First Prompts G-20 Deadlock on Free Trade By Robert Hutton and Raymond Colitt July 7, 2017, 5:30 PM EDT G-20 summit in Hamburg threatens to highlight U.S. isolation Macron uses iPhone to try and explain how global trade works

Donald Trump talk with Justin Trudeau in Hamburg, Germany, on July 7, 2017. Photographer: Ludovic Marin/AFP/Getty Images World leaders meeting in Hamburg ran into a major rift over global economic policy as President Donald Trump held firm to his America First doctrine at the expense of unity. The first day of a two-day summit of Group of 20 leaders was marred by disagreement on free trade and on climate change, with Trump’s protectionist stance the chief sticking point. During a working lunch, Trump stressed that he will always defend the American worker, according to a western diplomatic official familiar with the closed-door session. French President Emmanuel Macron challenged Trump’s view that the U.S. is losing out on trade, the official said. Taking out his mobile phone, Macron said that when he bought it, he created a trade deficit with the U.S., but that when America built it, it created a trade deficit with China. His point was that it doesn’t make sense to talk about bilateral trade deficits in a multilateral world, the official said. The exchange illustrates the world’s struggle to come to terms with the Trump era and his administration’s determination to remold the postwar global consensus in favor of the U.S. The last major summit, of G-7 leaders in May, ended with the U.S. isolated on climate change. With impasse again threatening, this time on trade, government officials known as sherpas were preparing to work into the night in a bid to forge a compromise that all G-20 leaders can support. “The sherpas still have a big chunk of work ahead on the statement on trade,” German Chancellor Angela Merkel, the summit host, told reporters. “These discussions are very difficult -- I don’t want to beat around the bush.” Buzzing Helicopters Outside the talks, tension hung in the air as sporadic violence broke out among anti-globalization protesters and anarchist groups. Locals woke to find cars burning in parts of the city, police called in reinforcements and the sound of buzzing helicopters could be heard all day. At one point Melania Trump was unable to leave her hotel because of security concerns. Back in the room, negotiations stumbled even after Merkel said most G-20 leaders are committed to trade that’s “free” but also “fair,” a semantic concession to Trump’s complaint that global commerce is biased against the U.S. Italian Prime Minister Paolo Gentiloni, who hosted the G-7 in Sicily, said that discussion on bolstering growth without “defensive stands on protectionism” remained open. The issue of climate change is “naturally linked” to trade, with an “overwhelming majority” of G-20 countries supporting Paris accord, he said. “We have to decide, either we go for free and fair trade, or each nation protects its own garden,” he told reporters. Empowering Women Saturday’s sessions will tackle migration -- another area where leaders disagree -- and a “partnership with Africa,” then digitization, empowering women and employment. However, Trump’s protectionist bent looks set to dominate in Hamburg as it did in Sicily. Chinese President Xi Jinping kicked off this meeting with a coded criticism of how certain “major developed nations” have “significantly backtracked” on globalization, and made a pitch for nations such as his own and Russia to step up and fill the leadership vacuum. Later, over lunch, Trump sat with his arms folded and scowled as Xi spoke, according to the diplomatic official. Even President Vladimir Putin, who met with Trump for the first time Friday, pushed the U.S. leader to come around on trade, according to Russia’s economy minister. “Nineteen countries were speaking about free trade and one country was highlighting that this country -- United States -- needs reciprocal approach to the trade,” Maxim Oreshkin said in an interview in English with Bloomberg Television. “So that was kind of dissonance between the position of United States and position of all other countries.” Still, Merkel is an old hand at negotiations like this and committed herself to finding an agreement. Mexican Foreign Minister Luis Videgaray also expressed confidence that a compromise can be reached. “There are some differences and I think in the coming hours we can get a text that is agreeable to all,” he said. “There is a consensus that we should have more trade not less. It’s got to be trade that is more inclusive and gives a fair opportunity to everybody.”