At G7 ministerial, USA fails to reassure EU, Japan over 'Trumponomics'

At G7 ministerial, USA fails to reassure EU, Japan over 'Trumponomics'

At G7 ministerial, USA fails to reassure EU, Japan over 'Trumponomics'

The two officials did not discuss currency issues during their meeting in Bari, southern Italy, Aso told reporters after the talks, held on the fringe of a two-day meeting of the Group of Seven finance ministers and central bank heads from Friday. During his presidential campaign, Trump charged that past administrations had failed to take a tough stand on enforcing trade agreements and this failure had cost millions of good-paying factory jobs and resulted in an enormous US trade deficit. Monetary policy should continue to support the economy, they said, while recognizing the world faces a prolonged period of modest growth and rising inequality.

Mnuchin had said that global trade should be "fair" and "reciprocal" during the G20 meeting in March, and his refusal to change his stance on the matter during this most recent G7 meeting stirs greater uncertainty in worldwide trade as the existing global consensus is perceived as crumbling without the active support of the world's largest economy.

US Treasury Secretary Steven Mnuchin is expected to brief his counterparts on his administration's preferred tax and trade policy.

The unwillingness of the US Treasury administration under president Donald Trump to sign up to a stronger attack on protectionism has upended global diplomacy on the topic of trade.

"We reaffirm our existing G7 exchange rate commitments to market-determined exchange rates and to consult closely in regard to actions in foreign exchange markets", it said.

Yet, he added, "We don't want to be protectionist, but we reserve our rights to be protectionist to the extent that we believe that trade is not free and fair".

European officials complained that the US meaning of "fair trade" remained unclear and that the only way to establish fairness was to abide by the multilateral framework developed by the World Trade Organization.

The lack of consensus was reflected in the blandness of the meeting's closing statement, which avoided a precise trade agreement.

In the final communique, the ministers and governors only mentioned that they were "working to strengthen the contribution of trade to our economies".

A broader theme not on the written agenda, however, was the desire of foreign leaders to get a better read on Trump's policies, and USA officials desire to make their positions clear.

Pier Carlo Padoan, Italy's minister of economy and finance, said he is watching the US approach "closely" for lessons other countries can use in reforming their tax codes.

They called the G7 countries "the real culprits of poverty and social inequality" in the world.

G-7 governments-Canada, France, Germany, Italy, Japan, the United Kingdom and the US -have struggled to turn their concern for inclusive growth into policy action, however.

"All the six others. said explicitly, and sometimes very directly, to the representatives of the U.S. administration that it is absolutely necessary to continue with the same spirit of global co-operation", Sapin was quoted by Reuters as saying.

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