Days before a gathering of G20 ministers gather for a summit in Argentina, French Finance Minister Bruno Le Maire has warned that a trade war is now a reality.
He said that the law of the jungle is the basis of the formulation of the present trade policies of the United States which is imposing unilateral tariffs even on one-time trade allies such as the EU, Canada and Mexico.
But China and EU were urged to open up their markets to US companies by US Treasury Secretary Steven Mnuchin while he defended the tariffs.
Eu was described as a foe on trade by US President Donald Trump last week. Later in the week, he said that he was open to imposing tariffs on the entire $500 billion of Chinese exports into the US.
There is a large trade deficit that the US faces in trading with both China and the 28-member EU.
Finance ministers and central bankers of the world’s top 20 economies are slated ot gather and deliberate at the two-day talks in Buenos Aires.
“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 told AFP news agency.
“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 further said that if cannot be considered by the EU to strike a free trade agreement with the US before America withdraws the tariffs imposed on steel and aluminum and added that a trade war was now a reality.
The trade tariffs of Trump were backed by the US treasury secretary while saying that both China and the EU first must open up their markets for American countries.
“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.
Mnuchin warned that the punitive tariffs against Beijing were “a realistic possibility”.
“We’ve been very clear with our objectives,” he added.
tariffs of 25% on steel and 10% on aluminum imported into the US was imposed by the Trump administration on 1 June.
According to the argument of Trump, American producers of steel and aluminum are threatened by global oversupply of the metals which is driven by China. He claimed that the steel and aluminum industry was vital for the US.
Later, bourbon whiskey, Harley Davidson motorcycles and orange juice were in the list of US products that the EU imposed retaliatory tariffs on.
On China, the US is taking a tougher stance as the Trump administration issued a new list of Chinese products worth $200 billion last week that it wants to tax.
(Adapted from BBC.com)