During the recent G20 finance ministers and central bankers meeting in Asheville, North Carolina, US Treasury Secretary Scott Bessent highlighted China's lone dissent from a joint statement. This statement criticized "non-market based economies pushing out a never-ending stream of cheap exports" as unsustainable. Bessent noted that 19 G20 members agreed to this sentiment and would take action to address these imbalances, with China being identified as the country with the "world's largest and unsustainable current account surplus" at $1.2 trillion in 2025. China also reportedly objected to paragraphs concerning the Strait of Hormuz, IMF surveillance of global imbalances, and external debt owed to G20 members.
In a separate meeting, Bessent met with Bank of Japan Governor Kazuo Ueda, urging sound monetary policy to stabilize inflation expectations and avoid excessive currency volatility. Bessent also expressed strong support for Japan's market and monetary steps to counter the yen's "substantial undervaluation," recognizing its role in domestic inflationary pressures. These discussions underscore Bessent's efforts to influence monetary policy in key global economies.
The G20 meeting also coincided with ongoing trade tensions between the US and Canada. Following the breakdown of trade negotiations, the US imposed 50 percent tariffs on approximately $28 billion worth of Canadian goods. Canada responded with counter-tariffs on about $20 billion of American imports, targeting sectors like steel, dairy, and agricultural equipment. Bessent publicly dismissed Canada's ability to engage in a tit-for-tat trade war, stating that Canada's economy is 13 times smaller than the US. Canadian economists anticipate significant impacts from these tariffs, with one estimate suggesting a potential loss of 90,000 jobs due to sustained 50 percent US tariffs. The Canadian dollar has also shown volatility, with MUFG forecasting a slide to C$1.41 per US dollar in the third quarter.
