G20 says worsening trade wars pose risk to world economy

The world's top financial policymakers admitted on Sunday that trade tensions had worsened, posing a risk for the global economy, after a G20 meeting that emphasised differences between the United States and other nations.

IMF chief Christine Lagarde has warned that superpower trade wars threaten the global economic outlook. REUTERS/Aaron P. Bernstein

Following 30 hours of wrangling in what one official described as a "tense" atmosphere, the G20 finance ministers and central bank chiefs produced a final statement acknowledging that "growth remains low and risks remain tilted to the downside.

"Most importantly, trade and geopolitical tensions have intensified," the G20 said, adding they "stood ready to take further action" if required.

As a compromise pushed by Washington, the statement omitted language from a previous draft that mentioned a "pressing need to resolve trade tensions".

The statement capped two days of talks in the western Japanese city of Fukuoka that also tackled the thorny issue of taxing internet giants and, for the first time, the economic challenges posed by ageing.

But trade battles dominated as the US and China continue to threaten each other with tariffs that economists fear could slam the brakes on global growth.

The International Monetary Fund has said US-China tariffs could shave global GDP by 0.5 percent in 2020, nearly 500 billion euros, stressing the need to resolve differences between the superpowers to avoid plunging the world economy into another crisis.

IMF chief Christine Lagarde said that trade conflicts pose the "principal threat" to the global economic outlook.