US eyes ‘back to basics’ revamp of G-20 when it assumes presidency next year

WASHINGTON - The United States aims to pare the Group of 20 major economies back to its financial roots next year when it takes over the rotating presidency from South Africa, sources familiar with the Trump administration's plans said.

Washington has scaled back its participation this year, with Treasury Secretary Scott Bessent skipping a G-20 finance chiefs' meeting that started in Durban, South Africa, on Thursday, his second absence from an event this year.

Experts and administration sources say the absence of top U.S. officials reflects the Trump administration's skepticism about multilateral institutions such as the G-20, which the U.S. helped found in 1999.

U.S. President Donald Trump has upended the global economy with a wide-ranging trade war that has targeted many developing countries, including G-20 members, while slashing foreign development funds to pursue an "America First" agenda.

Three U.S. sources familiar with the matter say Washington still plans to assume the G-20 presidency at the end of the year, which coincides with the 250th anniversary of the United States.

But it will focus on two "tracks" - the leaders' summit and the financial track - eliminating other working groups and ministerial-level meetings, including those on energy, health, commerce and the environment, two of the sources said.

A more streamlined G-20 process would be in line with Bessent's call in April for the International Monetary Fund and World Bank to focus on their core missions of financial stability and development instead of climate finance and gender issues. The White House and Treasury had no immediate comment.

SECOND-ROUND RESET

Josh Lipsky, chair of international economics at the Atlantic Council in Washington, said Bessent and other senior U.S. officials want to get "back to basics," an approach being embraced by other G-20 members.

The U.S. has already withdrawn from co-chairing a working group on sustainable finance with China and it remains unclear whether Trump will join this year's leaders' summit in South Africa.

Many members agreed the G-20's portfolio had grown too large, triggering a review, said two sources familiar with the issue.

In 2024, G-20 host Brazil sought the group's endorsement of a global minimum tax on the ultra wealthy, a step that the Biden administration rejected as an overreach.

"There seems to be consensus at the G-20 that it has expanded a lot. G-20 South Africa is conducting a review of the G-20 process and will provide recommendations to streamline it. That is in line with what the U.S. is looking at," one of the sources said.

Activists and developing countries say they will watch U.S. actions, but that paring back could help the G-20 survive.

"Our hope is that development continues to be linked," said Eric LeCompte, executive director of the non-profit Jubilee USA Network. "Financial stability, debt issues and economic issues cannot be separated from development and global growth."

CRISIS ORIGINS

The G-20 was founded after the Asian financial crisis of 1997-1998, before expanding to include state leaders during the global financial crisis in 2008. It has been tested by U.S.-China tensions, Russia's invasion of Ukraine, and divergent views on the Middle East conflicts.

Brad Setser, a former U.S. official now at the Council on Foreign Relations, said the G-20 still offered a platform for high-level bilateral meetings.

He said Trump could welcome to the U.S. next year foreign leaders such as Chinese President Xi Jinping and even Russian President Vladimir Putin if the Ukraine war ended, without the fanfare of a bilateral summit or state visit.

Ben Harris, a former senior Treasury official now at the Brookings Institution, said Washington's decision to pull back offered China and others a chance to show leadership, which might not serve U.S. interests.

"It obviously creates a vacuum, and that vacuum will be filled." REUTERS