U.S. Treasury Secretary Steven Mnuchin smiles during a news conference at the G20 Meeting of Finance Ministers in Buenos Aires, Argentina, March 20, 2018. Image Credit: Reuters

Buenos Aires: The United States is not seeking a trade war over tariffs but does not fear one, US Treasury Secretary Steven Mnuchin said Tuesday 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,” he said.

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 come into force, comes as the world’s two biggest economies — the US and China — engage in a clash over trade rules, particularly overproduction, in which European and other US allies could sustain collateral damage.

“We sensed a willingness of the Americans to reduce tensions,” French ministry sources 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.

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.”

Working on consensus over tech

Ministers agreed to delay the search for a solution on touchy subject of taxing the four American tech giants, Google, Amazon, Facebook and Apple.

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,” Pascal Saint-Amans, director of the Center for Tax Policy and Administration at the Organization 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.

Muscovici is to present the EU Commission’s proposals in Brussels on Wednesday. He had sought to reassure his US counterparts in Buenos Aires on Monday, underlining that the EU measures “are a response to a situation, and are not anti-American measures.”

G20 ministers sounded a caution on bitcoin and other cryptocurrencies, agreeing that they “lack the key attributes of sovereign currencies” and pointing out that “at some point, they could have financial stability implications.”

Mnuchin, speaking on Venezuela, who introduced its own cryptocurrency to counter US sanctions, said the US would consider additional sanctions against President Nicolas Maduro’s socialist government.

“I can assure you that we will continue to evaluate the situation there and consider additional sanctions,” he said.