Published: Sat, May 20, 2017
Business | By Max Garcia

US fails to reassure Europe, Japan over 'Trumponomics'

US fails to reassure Europe, Japan over 'Trumponomics'

But ministers from the other G7 countries made it clear they did not share the U.S. secretary's view.

"A country without any common sense continues to own extremely risky weapons", Aso said of North Korea, which has not stopped its nuclear weapons and missile development despite global criticism.

"With Steven Mnuchin, our relations are improving every time we meet", Padoan said.

Mnuchin said preliminary discussions have begun with Canada and Mexico to renegotiate NAFTA, a topic that came up for discussion during his one-on-one meeting with Canadian Finance Minister Bill Morneau.

But finance ministers and central bankers from the Group of Seven leading nations avoided tackling one of the biggest worries among global policy makers: whether the Trump administration's America-first trade policies are setting the world's largest economy on a protectionist course.

After the meeting, officials from Japan and member European countries remained concerned about the economic shift in Washington, particularly after Mnuchin said the US reserved the right to be protectionist if it thought trade was not free or fair. "We are working to strengthen the contribution of trade to our economies", the G7 communique read.

US Treasury Secretary Steven Mnuchin rejects the idea that under President Donald Trump the United States is reviving protectionism, yet asserting that the US would still do that if "trade is not free and fair".

Mnuchin said a trade deal announced Friday with China showed the success of the Trump administration's trade approach.

The statement also stressed the need for common practices to detect vulnerabilities in the global financial system.

"We will work to lift actual and potential growth, while ensuring that the fruits of economic growth are shared more widely", the statement said.

Mnuchin spoke after face-to-face meetings with major trade partners such as Germany, Japan and Canada on the sidelines of the Group of Seven finance ministers' meeting in Bari, Italy.

Steven Mnuchin's third encounter with the worldwide community, at a meeting of finance chiefs in Italy, deepened ties even as his government's "America First" policy continues to challenge the global economic consensus.

"To the extent people had patched their networks, this would have been prevented", said Mr. Mnuchin.

G-7 governments-Canada, France, Germany, Italy, Japan, the United Kingdom and the US -have struggled to turn their concern for inclusive growth into policy action, however.

Trade issues are likely to be taken up at a G-7 leaders' summit on May 26 to 27 in Taormina, Sicily, that Trump will attend.

Those concerns include faster-than-expected USA interest rate increases, which could affect some developing economies by triggering an outflow of capital and investment, and China's reliance on excessively rapid credit expansion for growth.

A Group of Seven communique issued on Saturday said officials were "working to strengthen the contribution of trade to our economies" - a weaker pledge than the statement from the Group of 20 leaders past year to avoid protectionism in all its forms.

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