The world’s financial elite is striving to find common ground with U.S. officials on stressing the importance of global trade, according to the European Union’s commissioner of economic affairs.
Deputy finance ministers and central bankers are currently negotiating a communique all Group of 20 nations can agree on, Pierre Moscovici said in an interview with Bloomberg. This is despite Treasury Secretary Steven Mnuchin telling his counterparts that the U.S. stands by its policies to defend its own economic interests.
“Nobody wants to enter into a trade war—everybody is looking for a way to bridge the gap and find common tunes, especially on trade,” Moscovici said in Buenos Aires. “Protectionism is never the answer.”
With U.S. tariffs on aluminum and steel kicking in on Friday, governments from around the world have reached out to negotiate exemptions, while at the same time threatening retaliation. The EU has listed iconic U.S. products including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey as targets for import duties. But Moscovici stressed that a spiral of measures and countermeasures should be avoided.
“We are at a delicate moment—we need to prepare a possible response to American measures,” he said. “The EU is preparing for that, but we think the best is to avoid a scale up” because “we must absolutely avoid trade wars.”
Moscovici said he’s “cautiously optimistic” that an agreement on common language on trade can be agreed before G-20 finance chiefs conclude their two-day meeting on Tuesday. “I’m quite hopeful that we won’t repeat the melodrama of Baden-Baden,” he said.
At last year’s gathering in the German city, Mnuchin successfully fought to set aside the group’s previous pledges to avoid all forms of protectionism in the communique, later joking that the battle was the G-19 against one.
“We prefer an attitude which will be more enthusiastic on multilateralism and free trade,” Moscovici said. “Avoiding multilateralism in a multilateral institution makes no sense.”