Trump’s G20 trade push faces skeptical audience
The second Trump administration has overtly used trade as an instrument of economic pressure. By unilaterally imposing sweeping tariffs and pursuing what it calls reciprocal trade agreements—arrangements in which Washington invariably emerges as the biggest winner—it has further weakened the rules-based multilateral trading system.
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Now, as chair of the G20, the United States has circulated a trade agenda urging the world’s largest advanced and emerging economies to help build “a global trading order based on fair, reciprocal and balanced trade.”
The first priority is what Washington calls the weaponization of agricultural trade. Food has increasingly become a geopolitical tool. As international rules lose force, governments are more likely to resort to export restrictions, manipulate food aid, exploit food insecurity, or target agricultural infrastructure during geopolitical disputes.
Yet one hallmark of the U.S. presidency of the G20 has been difficulty in clearly explaining what it hopes to achieve. In the case of agricultural trade, many diplomats believe the initiative is aimed primarily at China, which imposed restrictions on imports of U.S. farm products and curbed fertilizer exports in retaliation for Trump’s tariff increases.
In other words, Washington openly uses trade as a tool of political leverage while objecting when trading partners respond in kind.
China’s restrictions on U.S. agricultural imports ultimately benefited exporters from countries such as Brazil, Argentina, and Indonesia. American farmers, meanwhile, became collateral damage in Trump’s trade wars and have yet to regain their previous share of the Chinese market despite subsequent agreements between Washington and Beijing.
That is one reason the White House has sought to support the farm sector ahead of November’s elections. It recently asked Congress to approve an additional $11 billion in assistance, bringing this year’s direct payments to farmers to $44 billion. Government subsidies will account for more than a quarter of U.S. farmers’ net income.
The prominence of the issue also reflects the location of the G20 trade ministers’ meeting, scheduled for Sept. 30-Oct. 1 in Milwaukee, Wisconsin, a major agricultural hub. The most likely outcome is a broad political declaration with little practical effect—and one that falls well short of Washington’s ambitions.
The second pillar of the U.S. trade agenda targets what it calls structural global overcapacity. In practice, the Office of the United States Trade Representative (USTR) has already launched Section 301 investigations this year not only against China but also against the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. The investigations cover sectors ranging from steel, automobiles and batteries to semiconductors, solar equipment, electronics and processed foods.
According to Washington, persistent overproduction fuels exports to the United States—or to third countries that then export to the U.S.—thereby displacing American production and discouraging domestic investment. Many economists dispute that interpretation, and the issue is unlikely to gain meaningful traction at the G20.
Third, the United States wants G20 members to commit to banning international trade in goods produced with forced labor. Few countries would openly oppose such a goal. At the same time, however, Washington is conducting Section 301 investigations into nearly 100 countries—including Brazil and all 27 European Union member states—over forced-labor allegations.
China remains the primary target of U.S. pressure, and diplomats expect that, at best, the G20 could agree to a general statement supporting greater transparency in efforts to eliminate forced labor. The United States also wants to revisit the World Trade Organization’s Most-Favored-Nation (MFN) principle.
By imposing its unilateral reciprocal tariff arrangements, the Trump administration has effectively undermined one of the WTO’s core principles, which requires members to treat one another equally and extend trade concessions on a non-discriminatory basis. Some countries agree that access to lower tariffs should not always be unconditional and that the system may require greater flexibility. However, negotiations on that issue remain in their early stages.
The G20 may debate all of these topics, but it is unlikely to make meaningful progress on Washington’s agenda, given that the United States itself is increasingly the greatest obstacle to stronger global cooperation.
