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'Trade war a reality' French finance minister warns Trade war a reality, French finance minister warns
(about 9 hours later)
A trade war is now a reality, French Finance Minister Bruno Le Maire has warned as G20 ministers gather for a summit in Argentina.A trade war is now a reality, French Finance Minister Bruno Le Maire has warned as G20 ministers gather for a summit in Argentina.
The current US trade policy of imposing unilateral tariffs is based on "the law of the jungle", he said.The current US trade policy of imposing unilateral tariffs is based on "the law of the jungle", he said.
But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the EU and China to open their markets to allow free competition.But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the EU and China to open their markets to allow free competition.
Last week, US President Donald Trump described the EU as a foe on trade. Last week, US President Donald Trump described the EU as a "foe" on trade.
Mr Trump later threatened to impose tariffs on all $500bn (£380bn) of Chinese goods entering the US in a growing trade row.Mr Trump later threatened to impose tariffs on all $500bn (£380bn) of Chinese goods entering the US in a growing trade row.
The US has large trade deficits with both the 28-member EU and China.The US has large trade deficits with both the 28-member EU and China.
The two-day talks in Buenos Aires bring together finance ministers and central bankers of the world's top 20 economies.The two-day talks in Buenos Aires bring together finance ministers and central bankers of the world's top 20 economies.
What did the French minister say?What did the French minister say?
"World trade cannot base itself on the law of the jungle and the unilateral increase of tariffs is the law of the jungle," Mr Le Maire told AFP news agency."World trade cannot base itself on the law of the jungle and the unilateral increase of tariffs is the law of the jungle," Mr 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 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."
"The law of the jungle will only turn out losers, it will weaken growth, threaten the most fragile countries and have disastrous political consequences," Mr Le Maire said.
He added that a trade war was now a reality, and that the EU could not consider negotiating a free trade deal with the US without America first withdrawing its tariffs on steel and aluminium.He added that a trade war was now a reality, and that the EU could not consider negotiating a free trade deal with the US without America first withdrawing its tariffs on steel and aluminium.
What about Mr Mnuchin's comments? What is the US argument?
The US treasury secretary backed President Trump's stance on trade with the EU and China, saying they both need to open their markets. Mr Mnuchin said it was pretty simple.
"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."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.
Turning to China, Mr Mnuchin warned punitive tariffs against Beijing were "a realistic possibility". Mr Mnuchin said China had to open its markets "so we can compete fairly".
"We've been very clear with our objectives," he added. "We share a desire to have a more balanced relationship and the balanced relationship is by us selling more goods [to China]," he said.
How has the tariffs row worsened? Tariff war. How did we get here?
On 1 June, the Trump administration introduced tariffs of 25% on steel and 10% on aluminium imported into the US. Little has caused Donald Trump more annoyance than the trading deficits between the US and its major partners.
Mr Trump argues that global oversupply of steel and aluminium, driven by China, threatens American producers, which are vital to the US. He believes that if you have a trade deficit - if you import more than you export - you are losing out.
The US president believes that if you have a trade deficit - if you import more than you export - you are losing out. Tackling what he has called "unfair trading practices" has become a key plank of his administration.
The EU later introduced retaliatory tariffs on a range of US goods, including bourbon whiskey, Harley Davidson motorcycles and orange juice. The European Union, China and the North American Free Trade Agreement (Nafta) countries, Mexico and Canada, have been his main targets.
On China, Mr Trump warned earlier this week he was ready to slap tariffs on all imports from the country. Mr Trump has pulled out of the Trans-Pacific Partnership (TPP) trade deal and wants a renegotiated Nafta deal.
Last week, Washington listed $200bn worth of additional Chinese products it intends to place tariffs on as soon as September. The key actions so far
The list named more than 6,000 items including food products, minerals and consumer goods such as handbags, to be subject to a 10% tariff. January: The US slaps tariffs on imported washing machines and solar panels
It is still under public consultation, to last until the end of August. June: The Trump administration introduces tariffs of 25% on steel and 10% on aluminium imported into the US, arguing that global oversupply, driven by China, threatens American producers. The EU enacts retaliatory tariffs on a range of US goods, including bourbon whiskey, Harley Davidson motorcycles and orange juice
The US and China have already imposed tit-for-tat tariffs of $34bn on each other's goods. July: A 25% tariff affecting $34bn (£25.7bn) of Chinese goods begins. China retaliates in kind, with equivalent tariffs on the same value of US goods. Mr Trump threatens a 10% additional tariff on $200bn worth of additional Chinese products, naming more than 6,000 items