Steely resolve: US unafraid of trade war, if it ever comes

Buenos Aires - G20 also agrees to 'monitor' booming cryptocurrency market

The United States is not seeking a trade war over tariffs but does not fear one, US Treasury Secretary Steven Mnuchin said after a meeting of G20 finance ministers.
A trade war "is not our goal, but we are not afraid of it", Mnuchin said at the end of the two-day meeting in Buenos Aires aimed at averting a crisis sparked by looming US tariffs on steel and aluminium. "We have to be prepared to act in the US interest to defend free and fair reciprocal trade. In doing that there is always a risk."
"That's not our goal. But we are not afraid of it."
Mnuchin was speaking after ministers agreed not to condemn the US move in the meeting's final statement, but instead spoke of "heightened economic and geopolitical tensions".
"Downside risks persist and, over the medium term, challenges remain to raise growth and make it more inclusive," the ministers from the most developed and emerging economies said.
The final communique, approved three days before US trade tariffs on steel and aluminium go into effect, comes as the world's two biggest economies - the US and China - clash over trade rules, particularly overproduction, in which European and other US allies could sustain collateral damage.
"There is a desire to see China open their markets so we can participate in their markets they way they participate in ours, in a much more balanced and reciprocal trading relationship," the US Treasury chief said of the general view among his G20 counterparts.
On the tariffs row, he added that his delegation had "very productive conversations" with G20 allies. "We had a bunch of discussions about trade and tariffs and those continue to be ongoing," Mnuchin said. "We sensed a willingness of the Americans to reduce tensions," a French ministry source said after a meeting on Monday between France's Finance Minister Bruno Le Maire and Mnuchin.
Le Maire was among several EU ministers to plead for an exemption from the US tariffs, saying the problem was due to China's overcapacity, not key allies in Europe. "The decision they want to take is not appropriate," Le Marie told reporters after the meeting. Mnuchin's veiled threat was echoed by EU Economic and Financial Commissioner Pierre Moscovici, with a statement carrying the same hint of steel in a velvet-gloved hand.
"The EU does not want an escalation on trade, it does not want a trade war, but it is ready to react, even if our preferred option is dialogue," he said. "Our countermeasures are ready."
Ministers agreed to delay the search for a solution on the touchy subject of taxing the four American tech giants Amazon, Apple, Facebook and Google.
In their statement, the ministers pledged to "work together to seek a consensus-based solution by 2020", on the taxation of digital giants. They agreed to provide an update on the situation in 2019.
"This is a positive message: there was no shock at the meeting," said Pascal Saint-Amans, director of the Center for Tax Policy and Administration at the Organisation for Economic Cooperation and Development.
On the eve of the meeting, Mnuchin had sounded a clear warning that the US "firmly opposes" any new tax aimed at its big tech firms, despite a growing EU resolve to tackle the issue. 
Moscovici was due to present the EU Commission's proposals in Brussels on Wednesday. He had sought to reassure his US counterparts in Buenos Aires, underlining that the EU measures "are a response to a situation, and are not anti-American measures."
 
Agreement to 'monitor' cryptocurrencies
Meanwhile, inancial policymakers from the G20 agreed to keep a watchful eye on cryptocurrencies and opened the door to regulating the booming industry at a later stage.
Wild swings in the price of Bitcoin, the best known of a myriad of digital currencies issued by private companies, and fears they may be used for evading taxes, launder money, finance terrorism or just scam small investors have raised calls for concerted actions by global regulators.
Finance ministers and central bankers from the world's 20 largest economies meeting in Buenos Aires asked regulators to monitor these "crypto assets" but stopped to stop short of any specific action, confirming a Reuters report published on Monday.
"We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed," G20 leaders said in the communique. They also welcomed new standards to be proposed by the Financial Action Task Force, a 37-nation group set up in Paris to fight financial crime.