G20 finance chiefs except China back action on distorted trade

European Economy Commissioner Valdis Dombrovskis said in a briefing that China is a major source of economic imbalances, but said the U.S. and Europe both also had roles to play in evening things out. In more direct comments, German Finance Minister Lars Klingbeil said the US- and Israeli-led Iran war, together with ongoing U.S. tariff disputes, were also major causes of uncertainty holding back the global economy. "Uncertainty is poison for economic growth," he said. "The tariff conflicts being pursued by the U.S., such as the current dispute with Canada, destroy trust." A selloff in global bond markets deepened on Tuesday, with Japan's 10-year bond yield hitting 3% for the first time since 1996 - the latest manifestation of investor concern about energy-driven inflation, potential monetary tightening and worsening fiscal conditions. Treasury officials said Bessent had called for sound monetary policy to anchor inflation expectations and avoid excessive currency volatility during his meeting on Sunday with Bank of Japan Governor Kazuo Ueda. "I have information that the market doesn't have, and it's my belief that the Japanese government and the BOJ will do the things that will lead to a stronger yen," Bessent told CNBC in an interview. The remarks, which underline Bessent's recent calls for the BOJ to raise interest rates, were seen by the markets as aimed at bolstering the case for a rate hike at the BOJ's policy meeting on September 17-18. The Trump administration won backing from all G20 financial leaders except China's on Tuesday to act against "non-market" policies and distortions that cause over-reliance on exports and hinder growth elsewhere. The finance ministers' meeting clearly focused on China, while Washington used a parallel G20 gathering of industry titans and commerce ministers to make the case for a hands-off approach to AI regulation. U.S. Treasury Secretary Scott Bessent said he had been proven right when he warned other trading partners last year that tougher U.S. tariffs would lead to an influx of Chinese goods diverted to their markets. "We believe that non-market-based economies pushing out a never-ending stream of cheap exports is not sustainable," he told a news conference. "I think that the fact that 19 countries did want to address this shows the sheer the enormity of the problem." A G20 chair's statement to conclude the meeting said the participants, except China's, agreed that countries should eliminate "non-market policies" that exacerbate imbalances. "In particular, countries with excessive and persistent external surpluses should remove distortions that constrain domestic consumption and that result in an over-reliance on exports for growth," the statement said. The two-day meeting of finance chiefs - which saw differences in tone between the U.S. hosts and some European participants - came amid a global bond market selloff on worries over growing debt levels and inflation pressures. China's massive export push has pressured economies across the globe, especially as the United States has imposed high tariffs on Chinese goods and outright bans on some products, such as Chinese vehicles. With chronically weak domestic demand, China has doubled down on exports of electric vehicles, semiconductors and other goods, and its total exports rose 23.9% in July year-on-year, prompting growing calls in Europe for tougher curbs on Chinese imports. G20 member China has shown little interest in longstanding calls for it to reduce industrial subsidies and rebalance its economy, while its yuan currency remains significantly undervalued by most measures.

G20 finance chiefs except China back action on distorted trade

Global uncertainty and market reactions

G20 backs action on non-market trade distortions

Bessent says higher barriers on Chinese goods may be needed

China, trade tensions and bond-market pressure dominate discussions

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