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G-20 calls for more dialogue on rising trade tensions

Christine Lagarde, right, International Monetary Fund Managing Director and Argentina Treasury Minister Nicolas Dujovne arrives for a press conference during the G20 meeting of Finance Ministers and Central Bank governors in Buenos Aires, Argentina, on July 21, 2018. (AP Photo/Gustavo Garello)

BUENOS AIRES, Argentina (AP) -- The world's top financial officials meeting in Argentina's capital on Sunday called for more dialogue on trade disputes that threaten global economic growth with one official warning that differences remain and tensions could escalate further.

The two-day gathering of G-20 finance ministers and central bankers in Buenos Aires took place as the United States and China are engaged in a full-blown trade war with both nations imposing tariffs on billions of dollars of each other's goods.

A final communique from the meeting said that although the global economy remains strong, growth is becoming "less synchronized" and risks over the short and medium terms have increased.

"These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies," the communique said. "We ... recognize the need to step up dialogue and actions to mitigate risks and enhance confidence."

On Friday, President Donald Trump renewed his threat to ultimately slap tariffs on a total of $500 billion of imports from China -- roughly equal to all the goods Beijing ships annually to the U.S. The White House has also itemized $200 billion of additional Chinese imports that it said may be subject to tariffs.

The U.S. has also imposed tariffs of 25 percent on steel and 10 percent on aluminum, including from Europe. China, the EU, Canada, Mexico and Turkey have counterpunched with taxes on U.S. exports.

As the Group of 20 gathering wound up Sunday, European financial affairs commissioner Pierre Moscovici said that differences of position remained despite the talks.

"These meetings have been taking place in an international context which is very challenging," Moscovici told reporters. "Trade tensions remain high and they threaten to escalate further."

But Moscovici said the summit that began Saturday had not been "tense," and that countries must remain "cool-headed and maintain a proper sense of perspective."

Representing the U.S. at the meetings is Treasury Secretary Steven Mnuchin, who on Saturday said the overall U.S. economy has not been harmed by the trade battles set off by Trump's get-tough policies. But he acknowledged that some individual sectors have been hurt and said U.S. officials are looking at ways to help them.

International Monetary Fund Managing Director Christine Lagarde has warned that a wave of tariffs could significantly harm the global economy, lowering growth by about 0.5 percent "in the worst-case scenario."

"Protectionism, I want to insist on that, is good for no one," Moscovici said. "Trade wars are not easy ... they create no winners, only casualties."

But Moscovici said that the EU remains open to dialogue.

"That's why EU President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmstrom will meet with Trump" in Washington D.C. next week, he said. "We hope this meeting will be productive and successful."

So far, global markets have remained generally calm despite the U.S.-China trade war and the other conflicts ignited by Trump.

But analysts say they expect Trump will impose more tariffs on China and potentially other key U.S. trading partners. With those nations almost certain to retaliate, the result could be higher prices for Americans, diminished export sales and a weaker U.S. economy by next year.

The Group of 20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging economic powers including China, Brazil, India and Argentina.

Officials in Buenos Aires also discussed issues including the future of work and infrastructure for development, the international tax system and financial inclusion. It is the third of five meetings by finance ministers and central bankers scheduled in advance of a main G-20 meeting in Argentina that will be held Nov. 30-Dec 1.

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