G20 Nations Split as Most Reject US Push to Curb Excess Industrial Capacity
SCMP · 2 SOURCESabout 2 hours ago2 MIN
Summary
A "handful" of G20 trade ministers have rejected US calls to curb excess industrial capacity and "non-market" policies, the US Trade Representative's office said on Friday, exposing deep divisions within the group of major economies. The rejection from the vast majority of G20 countries follows the Trump administration's imposition of tariffs of 10% or 12.5% on goods from 59 countries and the European Union over allegations that they fail to adequately enforce bans on forced labour. The US, serving as this year's G20 chair, issued the statement a day after a trade meeting in Milwaukee revealed that only two countries — Mexico and Argentina — signed on to a US-led statement calling for more work and cooperation to eliminate goods produced with forced labour from supply chains.
Key Points
- The US Trade Representative's office reported that only a "handful" of G20 trade ministers supported Washington's stance on excess industrial capacity, with a "few firmly rejecting" cooperative action
- At a trade meeting in Milwaukee, only Mexico and Argentina endorsed the US statement on eliminating forced labour from global supply chains
- The Trump administration has imposed tariffs of either 10% or 12.5% on goods from 59 countries and the European Union for failing to enforce forced labour bans
- USTR is conducting a second "Section 301" tariff investigation into 16 trading partners showing signs of excess industrial capacity, expected to result in new duties
- China had previously objected to a similar G20 statement at a finance leaders' meeting in North Carolina a month ago, denouncing forced labour and non-market policies
Why It Matters
The divisions within G20 underscore the growing tensions between the US and most of its trading partners over industrial policy and trade practices. While the US successfully pushed for consensus on condemning the weaponisation of food trade, the broader failure to reach agreement on excess capacity signals a fractured global trade landscape. Hong Kong, as a major trading hub deeply integrated into global supply chains, could face ripple effects from these escalating tariff measures and potential new duties resulting from the Section 301 investigation .
The divisions within G20 underscore the growing tensions between the US and most of its trading partners over industrial policy and trade practices. While the US successfully pushed for consensus on condemning the weaponisation of food trade, the broader failure to reach agreement on excess capacity signals a fractured global trade landscape. Hong Kong, as a major trading hub deeply integrated into global supply chains, could face ripple effects from these escalating tariff measures and potential new duties resulting from the Section 301 investigation .