Mnuchin Says U.S. Reserves Right To Be Protectionist

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G7 finance ministers and central bank governors gather around a table inside the Norman-Swabian Castle, the venue of their summit in Bari, Italy.

He said the discussions, which also included topics like cybersecurity and combating terror financing, were "very productive".

But ministers from the other G7 countries made it clear they did not share the United States secretary's view. During his presidential campaign, Trump charged that past administrations had failed to take a tough stand on enforcing trade agreements and this failure had cost millions of good-paying factory jobs and resulted in an enormous US trade deficit. It said Morneau emphasized that trade between the two countries was balanced and supported middle-class jobs.

US Treasury Secretary Steven Mnuchin said the United States reserved the right to be protectionist if it thought trade was not free or fair.

Mnuchin's brand of diplomacy had already showed signs of evolution between that meeting and one in Washington a month later, with his position that trade be "fair" rather than "free" crystallizing into a call for "reciprocal free trade".

That prompted the Italian minister to mount a robust defence of the sector "intended to dispel erroneous perceptions" of the situation, an Italian official told reporters. Still, he and Mnuchin stressed how important the U.S.

G7 finance ministers meet Friday in Italy, seeking common ground and stability on future world trade after US President Donald Trump's declaration that "America First" would be his mantra.

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Under pressure from the Trump administration, finance chiefs from the Group of 20 major economies - which include all the G-7 nations - dropped their traditional pledge to "resist all forms of protectionism" from a communique issued after their meeting in March in Germany.

The Italian hosts say the meeting themes will include making economic growth benefit more people; coordination among global financial organizations such as the worldwide Monetary Fund and the World Bank; and efforts to stop companies from dodging taxes by moving income across borders.

European officials complained that the USA meaning of "fair trade" remained unclear and that the only way to establish fairness was to abide by the multilateral framework developed by the World Trade Organization. In the final communique, the ministers and governors only mentioned that they were "working to strengthen the contribution of trade to our economies".

Italy's Minister of Economy and Finance Pier Carlo Padoan said there was agreement that trade is a "fundamentally positive situation we want to maintain and cultivate going forward".

Attention also focused on Trump's plans to cut USA corporate taxes.

In their closing statement, the finance ministers warned that long-term growth could remain subdued and that steps need to be taken to make the global economy work for everyone.

"'All the six others. said explicitly, and sometimes very directly, to the representatives of the USA administration that it is absolutely necessary to continue with the same spirit of worldwide cooperation, ' French Finance Minister Michel Sapin told reporters".