G20 trade ministers deadlocked over industrial overcapacity, says US trade chief

U.S. Trade Representative Katherine Greer announced that G20 trade ministers could not reach consensus on how to address excess industrial capacity and the removal of forced labour from supply chains during the two‑day meeting in Milwaukee, where the United States holds the rotating presidency. Greer said “nearly all countries agreed that this is an issue that requires action” on overcapacity, but the group failed to adopt a common approach, and the same stalemate applied to forced‑labour measures, even as President Trump recently imposed tariffs on 60 partners over alleged labour abuses. The deadlock came despite a broad acknowledgment that current trade‑remedy systems are inadequate, prompting Greer to justify potential unilateral U.S. steps; the United States is already probing 16 economies—including China, the EU, Japan and India—for overproduction that could “create an economy that rests on a house of cards.”

The meeting did produce a point of agreement on the “weaponisation of food through coercive trade actions,” a phrase championed by France’s trade minister Nicolas Forissier, who, together with German and British counterparts, condemned Russia’s attacks on Ukraine’s grain exports. Both sides of the conflict have disrupted Black Sea ports, accelerating the loss of agricultural export capacity faster than trade flows can recover. Forissier stressed that European criticism of Russia’s aggression was “the truth” but insisted the overall tone of the talks remained constructive, noting a shared consensus that weaponising food is unacceptable. Russia’s economic development minister Maxim Reshetnikov rebuked the European statements as political slogans, highlighting the diplomatic tension surrounding the issue.

Beyond the overcapacity and forced‑labour impasse, several G20 members used the Milwaukee forum to advance bilateral and regional trade initiatives. Canada’s international trade minister Maninder Sidhu announced ongoing negotiations with India, Turkey, Saudi Arabia and the EU on digital trade, expressing optimism about concluding talks with India in the coming months, and he met Greer to discuss deeper Canada‑U.S. cooperation. A Mexican official, speaking on condition of anonymity, reported steady progress toward a U.S. tariff reduction deal that could lower duties on steel, cars and aluminum, though the timing would not be rushed ahead of the U.S. midterm elections. These side discussions illustrate a broader push among G20 economies to seek cooperation with Washington on tariff relief even as the core group remains divided on structural trade challenges.

⚡ Effects Interpreter