French minister urges US to 'see sense' over trade tariffs
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French Finance Minister Bruno Le Maire said on Saturday the European Union could not consider negotiating a free trade agreement with the United States without Washington first withdrawing its tariffs on steel and aluminum.
Speaking to reporters at the G20 finance ministers and central bank governors meeting in Buenos Aires, Le Maire said there was no disagreement between France and Germany over how and when to start trade talks with the United States. Both agreed Washington needs to take the first step by eliminating tariffs, he said.
In an interview with French news agency AFP, Le Maire said Europe as a whole was worried about being dragged into a global trade war.
"This trade war will produce only losers, it will destroy jobs and put pressure on global growth,” he said.
"We call on the United States to see sense, to respect the rules of multilateralism and to respect their allies."
Global economic output to take a hit
International Monetary Fund chief Christine Lagarde opened the summit by reiterating her fears that increasing trade restrictions would hurt global GDP.
Lagarde said that taking into account "current announced and in process measures" an IMF simulation "indicates" that in a worst case scenario a half point would be cut from global GDP, amounting to some $430 billion.
And this despite projected growth in the world economy of 3.9 percent.
What concerns Le Maire the most is how supposed allies have ended up fighting over trade.
"Americans and Europeans are allies, we cannot understand how we, Europeans, can be affected by US trade tariffs," he said.
"What we want is to reconstitute trade multilateralism. Global trade cannot be based on survival of the fittest.”
Le Maire said the only way to solve such issues was through dialogue between the US, EU and China, rather than an escalation of punitive measures.
But US Treasury Secretary Steven Mnuchin refused to budge on demands for concessions.
"My message is pretty clear, it's the same message the president delivered at the G7: if Europe believes in free trade, we're ready to sign a free trade agreement with no tariffs, no non-tariff barriers and no subsidies. It has to be all three," said Mnuchin at the summit.
Le Maire responded, “We refuse to negotiate with a gun to the head. It must be the US that takes the first step to de-escalate.”
( - REUTERS, AFP)