The G20 financial leaders dropped a decade-long pledge to reject protectionism on Saturday after opposition from the US, raising fears the Trump administration could upset the global economic order.

The annual meeting of 20 finance ministers closed on Saturday afternoon without a statement voicing the bloc's longstanding opposition to "all forms" of tariffs and rules favouring one economy over another, after it failed to find a suitable compromise with Donald Trump's administration.

After leaders failed to draft new measures that would satisfy the US, they opted for just a fleeting reference to strengthening trade in their statement.

The free trade change comes as a surprise and blow to many of the representatives at the summit including China, Japan and European countries that have supported the policy for many years. It is set to pave the way for increasing protectionism from the new US Government.

Steven Mnuchin, the US treasury secretary, dismissed the group's traditional economic playbook of opposing protectionism as "not really relevant" any longer, and said the US now prioritised "balanced trade" over low border tariffs.

Mr Trump, who was elected on an 'America First' slogan, blamed US manufacturing job losses on free trade and has already pulled out of a proposed agreement with Japan and other Pacific Rim countries. He has also started the process to renegotiate the North American Free Trade Agreement with Mexico and Canada.