Economy

French finance minister says trade war is now a reality

Updated : July 23, 2018 08:50 AM IST

Trump later threatened to impose tariffs on all $500 billion of Chinese goods.

The US has large trade deficits with both the 28-member EU and China.

A trade war is now a reality, French Finance Minister Bruno Le Maire has warned as G20 ministers gather for a summit in Argentina.

The current US trade policy of imposing unilateral tariffs is based on "the law of the jungle", he said, BBC reported on Sunday.

But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the EU and China to open their markets to allow free competition.

Last week, US President Donald Trump described the EU as a foe on trade.

Trump later threatened to impose tariffs on all $500 billion of Chinese goods entering the US in a growing trade row.

The US has large trade deficits with both the 28-member EU and China.

The two-day talks in Buenos Aires bring together finance ministers and central bankers of the world's top 20 economies.

"World trade cannot base itself on the law of the jungle and the unilateral increase of tariffs is the law of the jungle," Le Maire said.

"The law of the jungle, the law of the fittest, this cannot be the future of global trade relations.

"The law of the jungle will only turn out losers, it will weaken growth, threaten the most fragile countries and have disastrous political consequences," Le Maire said.

He added that a trade war was now a reality, and that the EU could not consider negotiating a free trade deal with the US without America first withdrawing its tariffs on steel and aluminium.

The US treasury secretary backed Trump's stance on trade with the EU and China, saying they both need to open their markets.

"My message is pretty clear, it's the same message the president delivered at the G7 (last month in Canada): 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," he said.

Turning to China, Mnuchin warned punitive tariffs against Beijing were "a realistic possibility".

"We've been very clear with our objectives," he added.

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French finance minister says trade war is now a reality

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