The trade spat between the world’s two largest economies — China and the United States — is imperiling the entire Asia-Pacific, regional finance ministers have warned.
In a statement, finance ministers meeting in Port Moresby said risks to the global economy had increased thanks to “heightened trade and geopolitical tensions”, a veiled reference to the tit-for-tat trade dispute between Washington and Beijing.
US President Donald Trump has announced billions of dollars’ worth of additional tariffs on Chinese goods, claiming the country is systematically cheating on globally agreed trade rules.
Beijing has announced retaliatory measures, as it seeks to protect growth that is vital to the country’s rising political clout.
The result has been a sharp sell-off on equity markets and mutterings of concern from central banks across the globe.
Following Wednesday’s finance minister’s meeting, host and Papua New Guinea treasurer Charles Abel warned “protectionist trends stemming from trade tensions and the buildup of debt are troubling and a real threat to development and prosperity right around the APEC region”.
APEC leaders will gather in Papua New Guinea next month to try and sort through the dispute.
A lengthy statement from the bloc’s finance ministers late Wednesday did not bode well for agreement.
The document amounted to a wish list of competing interests among member states, sounding the alarm about “high and growing debt levels” while arguing “fiscal policy should be flexible and growth-friendly”.
Amid concerns that the Trump administration was pursuing a strong dollar policy and persistent suspicions that China is similarly manipulating currency exchange rates to gain a competitive edge, the group did say it would “refrain from competitive devaluation and will not target our exchange rates for competitive purposes”.