Donald Trump’s plans to reshape the international economic order loom large over the G20 meeting of finance ministers and central bankers, but there will be other matters on the agenda, too. Here are four of the main themes:
CURRENCY CONFUSION AND AMERICA FIRST
Donald Trump’s economic nationalism under the slogan of “America First” has pushed the protectionism versus globalization debate to the forefront. Trump attacked China on the campaign trail claiming it should be labelled a currency manipulator over the falling value of the yuan against the dollar, while his top trade official has claimed Germany has added to US deficit woes by exploiting a weak euro.
A stronger dollar makes US goods exported to China more expensive and Chinese-made goods cheaper, while a weak euro is boosting German exports and pushing the nation’s trade surplus to a record high.
But despite his threat to play hard ball with China, the Trump administration has yet to go after Beijing on the issue, perhaps mindful of the warnings that it could lead to a trade war.
THE GREENBACK CONQUERS ALL
The G20 meeting could provide a test of how the world plans to deal with the global ramifications of a strong dollar.
The greenback has surged as a result of Trump’s platform of tax cuts,economic stimulus and business deregulation. Added to this has been signs that the US Federal Reserve is open to further rate hikes.
A stronger dollar has made imports cheaper for US consumers but threatens Trump’s pledge to boost manufacturing by making US exporters less competitive. The rise of China and other leading emerging economies makes forging a consensus on mapping out a course for the dollar very difficult.
GLOBAL GROWTH WORRIES
The global economic outlook appears decidedly uncertain with Britain poised to launch talks to exit the European Union, China’s economy losing momentum, a new erratic resident in the White House in Washington and Europe facing a string of unpredictable elections that could once again underline the rise of populist forces.
AFRICA’S CHALLENGES
Improving long-term investment conditions in Africa is high on host country Germany’s G20 agenda, with the focus on promoting infrastructure development and education. The finance ministers from five African nations — Cote d’ Ivoire,Morocco, Rwanda, Senegal and Tunisia — are set to attend the Baden-Baden meeting. — dpa
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