"Work It Out", say G20 Finance Ministers

"Work It Out",  say G20 Finance Ministers

Tense times for international trade.  G20 Finance Ministers encourage nations to bury the hatchet.



What:  G20 Finance Ministers and Central Bank Governors Meeting

When:  June 8-9, 2019 in Fukuoka, Japan

Top Concern:  The “intensifying” global trade and geopolitical tensions.  US-China rift is particularly worrisome. (G20 communique / IMF summary)

“The principal threat stems from continuing trade tensions.  The first priority should be to resolve the current trade tensions.

         - Christine Lagarde, managing director, International Monetary Fund (IMF), discussing  the importance of modernizing international trading rules.
 

  • US Treasury Secretary Steve Mnuchin said that Trump has not decided whether to impose 25 percent tariffs on additional categories of imports from China.


Impact on Global Trade Growth 


IMF Outlook:  Growth is expected to improve this year, but the US-China trade war could shave 0.5 percent from global GDP output in 2020.

G20 Finance Ministers Summit Communique:  Growth for this year and next is projected to be low and risks ‘remain tilted to the downside’.

Key Trade Issues

  • Agreement to compile common rules by 2020 to close loopholes tech giants (Facebook, Google, and others) use to reduce corporate taxes.

 

  • How to adapt tax systems and regulations as business becomes more digitally based.

 

  • The need for stable infrastructure development.

 

  • Concerns that China’s Belt and Road initiative is piling debt on poor countries - who won’t be able to repay.

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