The G20, which accounts for two-thirds of the global population, wrapped up its two-day Finance Ministers and Central Bank Governors Meeting in the Japanese city of Fukuoka on Sunday.
The top financial leaders issued a joint communiqué following 30 hours of reportedly tense negotiations, acknowledging that “growth remains low and risks remain tilted to the downside.”
“We will continue to address these risks, and stand ready to take further action. We reaffirm our commitment to use [sic] all policy tools to achieve strong, sustainable, balanced and inclusive growth, and safeguard against downside risks,” the statement further read.
The group said, however, that global growth seemed to be “stabilizing, and is generally projected to pick up moderately later this year and into 2020.” Member states also expressed their readiness “to take further action” if required.
Meanwhile, the managing director of the International Monetary Fund, Christine Lagarde, warned that global trade tensions posed the “principal threat” to the world economic outlook and that the US-China trade war could make a “significant dent” in any recovery.
“The principal threat stems from continuing trade tensions,” she said.
Lagarde has formerly warned of the repercussions of that trade war. The US and China, the world’s two-largest economies, are in the midst of a year-long trade war, which, according to the IMF, could cut the global economic output by 0.5 percent, or about 455 billion dollars, next year.
US President Donald Trump initiated that trade war with China last year, when he first imposed unusually heavy tariffs on imports from the country. Since then, the two countries have exchanged tariffs on more than 360 billion dollars in two-way trade.
The two sides have held talks to settle the issue but to no avail. The G20’s final communiqué on Sunday did not call for a resolution of the deepening US-China trade conflict. The final draft had excluded a proposed clause to “recognize the pressing need to resolve trade tensions” from a previous draft that had been debated on Saturday.
Some G20 sources told Reuters that the omission came at the insistence of Washington. On Thursday, Trump declared that he would decide on carrying out his threat to levy tariffs on at least 300 billion dollars’ worth of goods from China later this month.
The upcoming G20 summit, scheduled to be held in the Japanese city of Osaka on June 28-29, will be the first opportunity for Trump and his Chinese counterpart, President Xi Jinping, to meet since the last G20 summit in Buenos Aires in late 2018. However, a meeting between the two is yet to be arranged.