US pushes G20 to cut trade imbalances and focus on China

The Trump administration is entering the G20 discussion with a blunt prescription for the world’s largest economic blocs: China should spend more, the United States should spend less, and Europe should invest more.

US Treasury Secretary Scott Bessent told Reuters he would urge G20 members to revisit their trade terms with China and consider higher barriers on Chinese goods. The goal, he said, would be to pressure Beijing to shift its economy away from exports and toward domestic consumption.

The push comes as global bond markets sell off sharply. Japan’s 10-year bond yield reached 3% for the first time since 1996, while yields also rose in the United States, the euro zone, Germany and Britain. Investors are weighing energy-driven inflation, possible interest-rate increases and worsening fiscal conditions. Britain’s yields jumped 10 basis points after a public holiday, amid renewed concern about attacks in the Middle East.

“

China would need to spend more, US would need to spend less, and EU would need to invest more.

China’s exports rose 23.9% year on year in July as weak domestic demand encouraged greater reliance on overseas sales of electric vehicles, semiconductors and other goods. The country’s goods trade surplus with the European Union reached €360.6 billion, while European governments have increasingly called for tougher restrictions on Chinese imports.

European Economy Commissioner Valdis Dombrovskis said China, the United States and the European Union all have responsibilities. “To put short the summary of this analysis, which we have been doing over the upscale couple of years, China would need to spend more, US would need to spend less, and EU would need to invest more.” China has shown little interest in reducing industrial subsidies, while the United States has yet to present a plan to reduce fiscal deficits that economists say contribute to its annual trade deficit of more than $1 trillion.

“

It’s important that all economic blocs take action to address the imbalances that increases obviously the efficiency of global policy response, and that obviously concerns also specifically China.