German Finance Minister Olaf Scholz on Saturday reiterated calls for "free and fair world trade" at the G20 meeting in Buenos Aires.

Scholz went on to reject US criticism of European trade policy. "The EU pursues a very rational policy and we do not try to achieve economic benefits through exchange rate parities," he said.

"The prosperity gains are greater for all if we cooperate," Scholz said at the meeting of G20 finance ministers and central bankers.

Recently imposed US tariffs will cost Germany up to €20 billion ($23 billion) in income this year, according to academic researchers at the Macroeconomic Policy Institute (IMK), which is part of the Hans-Böckler Foundation in Düsseldorf.

Read more: Trump's tariffs: When does a trade spat become an actual trade war?

The meeting came a day after US President Donald Trump threatened to impose tariffs on all $500 billion Chinese exports to the US.

Scholz had told reporters before the G20 — which accounts for 85 percent of global economic output and 75 percent of global trade — that he didn't expect tangible progress to be made at the Buenos Aires meeting.

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Washington holds its ground

US Treasury Secretary Steven Mnuchin told the meeting on Saturday that if the EU wanted to sign a free trade agreement with the US, it must make significant concessions.

"If Europe believes in free trade, we are ready to sign a trade agreement with no tariffs, no tariff barriers and no subsidies." However, "all three conditions would have to be fulfilled," he said.

Mnuchin told reporters there had been no "macro" effect yet on the world's largest economy from the first round of tariffs.

He said that there had been some "micro" effects such as retaliation against US-produced soybeans, lobsters and bourbon. EU counter-tariffs, he added, would not stop the US from achieving 3 percent growth this year.

Free trade consensus

French Finance Minister Bruno Le Maire emphasized that without the lifting of US import tariffs on aluminum and steel, negotiations on a trade agreement with the EU would not be possible.

France and Germany agree on this, Le Maire said. "We are waiting for the US to take the necessary steps to get out of the trade war," said Le Maire. "The US must come to its senses again and respect the world-recognized rules and their allies," he added.

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Lower global growth

The head of the International Monetary Fund (IMF), Christine Lagarde, warned that the recent wave of trade tariffs would hit global growth.

"It certainly indicates the impact that it could have on GDP, which in the worst case scenario under current measures ... is in the range of 0.5 percent of GDP on a global basis," Lagarde said.

In the briefing note prepared for G20 ministers, the IMF said global growth could come in at 3.9 percent in 2018 and 2019.

US Treasury Secretary Steven Mnuchin has stuck to Trump's trade guns in Buenos Aires

Mnuchin on China

Mnuchin also reiterated the call for what he called "fairer opportunities" for his country in trade with China. Washington has a "desire for a more balanced relationship and for that it is necessary that more US products be imported," he said.

China must open its markets to the US "so that we can compete fairly and increase our exports," he added. But if the People's Republic does not move, Trump's threat of punitive tariffs on all US imports from China is "definitely a realistic possibility," Mnuchin warned.

jbh/jm (dpa, RTR, AFP, APE)

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