The G20 agrees that large global imbalances threaten stability. Yet consensus remains elusive, with China rejecting concerns over its persistent trade surpluses and economic model
China’s restricted markets, investment-heavy growth model and targeted subsidies have contributed to persistent imbalances
Reforming domestic demand is essential to restoring balance
Washington’s case is weakened by its reliance on unilateral tariffs. Targeting trade deficits directly treats the symptom, not the underlying causes of global imbalances
Trade deficits reflect deeper differences in savings, investment and consumption
Tariffs cannot correct these structural factors, particularly when imposed unilaterally and without a broader strategy
China’s trading partners need a coordinated approach to encourage greater domestic consumption and market access
Addressing imbalances requires reform, not a cycle of tariff retaliation
India faces risks from both China’s closed, state-driven economy and rising US tariff barriers
The G20 must address both through cooperation, rather than allowing economic nationalism to deepen