BADEN-BADEN, Germany (AFP) - Finance ministers from the world's biggest economies struggled on Friday (March 17) to find common ground at global trade talks, in the face of Donald Trump's "America First" policy and his scepticism towards climate change.
All eyes were on United States Treasury Secretary Steven Mnuchin as finance ministers and central bankers from Group of 20 (G-20) nations gathered in Baden-Baden, western Germany.
Observers wondered whether Mnuchin would ape the tough talk that helped win Trump the presidency and has since seen the US walk away from a trans-Pacific free trade pact and attack "currency manipulation" by export giants China and Germany.
A European source said Washington displayed "full willingness to engage and to negotiate".
"Mnuchin's statement was not hardline ideology," a European source familiar with the talks said. "He had political points he wanted to make, but his style was engaging. There was no sense of wanting to take revenge or win a battle."
But there remained a gap on trade openness and climate change.
Participants still disagree on how to address trade in a final communique from the two-day summit, with the US at odds with other delegations over whether to repeat past commitments to reject protectionism, sources involved in the talks told AFP.
Trump himself sought to strike a conciliatory tone at a Washington press conference following his first meeting with German Chancellor Angela Merkel in Washington.
"I'm a free trader but also a fair trader," the President said, rejecting a description of his policies as "isolationist."
"Millions of hardworking US citizens have been left behind by international commerce and together we can shape a future where all of our citizens have a path to financial security," said the New York property tycoon.
'BUY AMERICAN, HIRE AMERICAN'
Slow growth and halting economic reform could be blamed for "a backlash against globalisation," OECD head Angel Gurria said in Baden-Baden as he presented a report urging nations to spread the proceeds of growth more widely.
Trump was elected on the back of exactly such a political storm over deindustrialisation in vast areas of the United States.
He declared in his inauguration speech that "we will follow two simple rules: buy American and hire American."
Those caught in the crosshairs include German luxury carmaker BMW, against which Trump has threatened punitive taxes of 35 per cent if it does not back down on building a factory in Mexico.
The rhetoric has alarmed key trading partners, including export giants China and Germany.
On Thursday, following talks with German Finance Minister Wolfgang Schaeuble, Mnuchin said Washington had no desire to fight "trade wars" with other economic powers.
"Our desire is that... when there is imbalances in trading relationships that we have a need to address that," Mnuchin said after the pair met in Berlin.
Mnuchin said Trump's administration would keep a close eye on the levels of key global currencies, but pursue policies in the interest of "economic growth that is good for the US and the rest of the world".
CLOUDS OVER CLIMATE CHANGE
Trump's stance on climate change also sat uneasily with the rest of the room, as sources say the US delegation is resisting wording in the final communique on the issue.
A source close to the talks said US negotiators appear to be unable to commit due to an absence of mandate from Washington.
On Thursday, Trump proposed to take the axe to environmental financing, slashing funds in his first national budget proposal for the Environmental Protection Agency (EPA) by a third, as well as eliminate contributions linked to the UN climate change programmes.
But EU economy commissioner Pierre Moscovici noted that "we are not here to talk about the domestic policy of this or that member state, we are here to talk about what we can do together."
"It is essential that we affirm that common principles here so that the process can continue to advance," he told AFP.
French Finance Minister Michel Sapin said if no agreement could be found on both sticking points, that could be reflected in Friday's final statement.
"Our heads of states are meeting in a few weeks. On subjects that are so important, it's not up to the finance ministers to block or to walk back on the issue, there will not be any backsliding on such fundamental issues," he said.