Australia has signed off on a warning from G20 nations calling for an easing of tensions in the US-China trade war to avoid “collateral damage.”
Treasurer Josh Frydenberg joined treasurers and finance ministers from Canada, Indonesia and Singapore in the statement by the alliance of signatories.
The stern warning, published in the Australian on Friday, outlines their concerns over the strained economic relations between the superpowers.
“At this moment, rising trade tensions are a serious concern. While we acknowledge that there are legitimate issues that must be addressed, the risks of collateral damage are growing,” the statement reads.
The G20 leaders' statement described the impact of “dampened global trade conditions” being witnessed alongside the trade dispute.
Treasurer Josh Frydenberg during Question Time in the House of Representatives at Parliament House in Canberra. Source: AAP
“Uncertainty over the outlook is contributing to a slowdown in trade and manufacturing activity,” the statement reads.
“We have seen a return of financial market volatility, currency instability, and decreased capital flows to emerging economies.”
Their warning comes after US President Donald Trump declared that $250 billion in increased new tariffs would be delayed in a “gesture of goodwill” to avoid China’s 70th anniversary.
Alongside Australia’s support, the statement was signed by Canadian Finance Minister Bill Morneau, Indonesian Finance Minister Mulyani Indrawati and Singapore’s Deputy Prime Minister and Finance Minister Heng Swee Keat.
The joint statement cites that action needs to be taken to change the direction of the current economic outlook.
“Growth has slowed and risks remain tilted to the downside,” the statement reads.
“Collectively, we need to take steps to reverse this course. We need to champion the rules-based multilateral system.”
Both Mr Frydenberg and Prime Minister Scott Morrison have outlined their concern over recent global economic headwinds.
But Mr Frydenberg remained optimistic towards Australia’s financial resilience when the country posted its slowest annual growth in a decade, earlier this month.
"Today's national accounts show the Australian economy continues to grow in the face of significant headwinds, both international and domestic," the Treasurer said last week.
"Despite the challenges that the Australian economy is encountering, very significant challenges, both domestically and internationally, the trade tensions with flood, with drought, we have still performed relatively well.”
In the joint statement G20 leaders said the free flow of trade had helped ensure a “financial safety net” and should be protected.
“The free flow of trade, investment and ideas have helped lift more people out of poverty that ever before,” the statement reads.
“The multilateral system provides the economic and political security to allow both big and small countries to fulfil their tremendous potential."
