BADEN-BADEN, Germany – The Trump administration on Saturday rejected a statement from other leading economies that warned against the perils of trade protectionism, the latest sign of how the administration's more combative approach to diplomacy could create rifts with U.S. allies and leave traditional partners in the dark about the direction of U.S. policy.
Treasury Secretary Steven Mnuchin, at a gathering of economic ministers and central bankers from the 20 largest economies, rebuffed multiple entreaties from German officials to include in the meeting's joint statement language stressing the importance of free trade and that it should be conducted in a "rules based" manner, following existing standards and agreements.
By rejecting language that would have said the United States is opposed to protectionism, the White House sent a clear signal that it would not accept existing trade norms and could pursue a more antagonistic approach with trading partners. Such language has been considered uncontroversial in recent meetings of the Group of 20.
"I understand what the president's desire is and his policies and I negotiated them from here, and we couldn't be happier with the outcome," Mnuchin said Saturday.
Trump made opposition to free trade a cornerstone of his presidential campaign and pulled the United States out of a sweeping Asia trade deal shortly after taking office. He has threatened tariffs and other measures to correct what he says are other countries' unfair advantages in their trade relationships with the United States, mostly taking aim at China and Mexico.
For many years, the U.S. has been the country rallying other nations to the cause of free trade and common language in the communiqués that follow meetings of economic ministers. Several European officials who had attended past G-20 meetings said it was the first time the United States had blocked such an effort.
The move follows new strains in the U.S. relationship with Britain and Germany, traditionally two of America's most steadfast allies.
German Finance Minister Wolfgang Schäuble said the United States was at an "impasse" with others about what they should say on trade protectionism, so they decided to say nothing at all. He also accused the Trump administration of not having a firm view on what it was seeking in terms of a trade policy.
Schäuble said that "sometimes at such meetings you cannot reach all the results that you may want to achieve because you cannot force partners to go along with wording they are not [OK] with."
The Germans had tried to get Mnuchin on board. Sensing opposition to the initial language from the Trump administration, German officials had watered it down several times, but Mnuchin resisted.
Finally, Germany's top central banker, Jens Weidmann, told his colleagues that the efforts to reach an agreement on the trade talks had failed.
Mnuchin then asked whether they could agree on more generic language that said the countries wanted to "strengthen the contribution of trade." Several finance ministers balked, saying that such language was meaningless.
Still, a version of Mnuchin's proposal ended up in the final agreement, which contained just this brief reference: "We are working to strengthen the contribution of trade to our economies."
Last year's joint statement said, "We will resist all forms of protectionism."