The reality of a trade war has arrived, according to Bruno Le Maire, the French finance minister, speaking as G20 ministers gathered for a summit in Argentina.
He said the US trade policy of unilateral tariffs was based on the “law of the jungle” as he pushed back against the demands of Donald Trump’s administration.
The result is that the US and its European Union allies are locked in trade stalemate after Steven Mnuchin, US Treasury Secretary, refused to drop US demands.
In his opening salvo at the Group of 20 summit in Buenos Aires, Mr Mnuchin urged China and the EU to respect “free, fair and reciprocal trade” amid talk of an escalating global trade conflict, but his French counterpart fired back that the US must “return to reason.”
Mr Mnuchin was inflexible in his approach to the EU following a series of tit-for-tat measures that began with US President Donald Trump’s decision to slap tariffs on steel and aluminum imports.
“My message is pretty clear, it’s the same message the president delivered at the G7: 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.
That provoked a firm response from Mr Le Maire at the meeting, which brings together finance ministers and central bank governors from the world’s 20 leading economies.
“We refuse to negotiate with a gun to the head,” he said. “It must be the US that takes the first step to de-escalate.”