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Trump isolated as USA slowly detaches from G-20 positions

10 July 2017

President Trump, just back from his first G20 summit, is touting his trip to the gathering of world leaders as a "great success for the U.S".

No bilateral meeting between the two leaders have been scheduled so far.

Also, invoking national security is all but taboo at the World Trade Organisation, the arbiter of global trade rules, because it is largely seen as a way to wage economic warfare by citing arbitrary defense concerns. Still, no matter what tariffs Trump imposes, the US does not have the capacity to produce enough steel to support the country's own domestic industries.

The G7, which includes Canada, Japan, the US and several European countries, have called for a solution to global overcapacity in steel, and the European Union has previously accused China of steel dumping while levying duties of its own.

Global institutions such as the World Trade Organization are premised on the concept that trade is in their members' mutual interest and that they will therefore rarely, if ever, seek exceptions to the rules based on subjective individual claims such as national security - as opposed to measurable violations such as dumping goods below production cost. "It also remains to be seen what the American president brings (to the meeting)".

"There is a danger that the summit will lead to polarisation between the U.S. and other countries" on climate change and other issues, warned Oxford Analytics economist Adam Slater.

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Since then, Trump has frequently praised Xi on Twitter for his help reining in North Korean leader Kim Jong Un's nuclear program. The statement said Trump also expressed his desire "to seek more balanced trade relations" with America's trading partners.

As the Friday start of the Group of 20 economic summit in Hamburg approaches, the Trump administration represents one of the chief sources of uncertainty in global trade. It is unclear whether his message reached U.S. President Donald Trump. He suggested putting on Chinese imports 45% tariff and said he would announce on his first day in the office that China was a currency manipulator, and he said proposing taxing imports from Mexico that he would rip up the trade deals and referred this as the Trans-Pacific Partnership, or TPP.

In 2016, steel producers in the European Union sold over 3.2 million metric tons of their steel to the United States, which is the largest importer of steel in the world. An administration official, however, told Reuters last week that the report would be released after Trump spoke with leaders at the Group of 20 summit in Germany later this week.

And applying trade barriers to those other countries makes no sense, in national security terms, because majority are at worst not hostile to the United States and in many cases are close US allies.

European countries would prefer a multilateral solution on steel, he said.

World Trade Organization members are already reeling from the risky precedent being set by a growing preoccupation with national security measures at the Geneva-based trade body.

Trump isolated as USA slowly detaches from G-20 positions