Financial leaders from the G20 will gather in South Africa this Thursday. This important meeting occurs amidst concerns about President Donald Trump’s trade policies and doubts about the group’s capability to address international issues in unison. The G20, known for its collaboration in confronting the global financial crisis, recently suffered from internal conflicts among significant members. Under the leadership theme of ‘Solidarity, Equality, Sustainability’, South Africa aims to bring forward an African-centric agenda, discussing topics such as the hefty cost of capital and resources for climate action.
The G20’s primary objective is to orchestrate global policies, however, its resolutions are discretionary and not obligatory. Surprisingly, Scott Bessent, the U.S. Treasury Secretary, will not participate in the two-day convention of finance ministers and central bank chiefs in Durban, a coastal city of South Africa. Bessent’s absence was also felt at the Cape Town assembly held in February, which was missed by several high-ranking officials from China, Japan, and Canada too.
Interestingly, United States is set to take over the G20’s rotating presidency by year’s end. Although Bessent’s unavailability isn’t an optimal circumstance according to a G20 delegate, the United States is still taking part in trade discussions, global financial discourses, and talks on climate policy. The Durban convention will also be missed by finance ministers from India, France, and Russia.
South Africa’s Central Bank Governor Lesetja Kganyago emphasizes the importance of representation at such gatherings, maintaining that each country should have someone with the authority to represent its interests. The essential question, as Kganyago posed, was whether every nation was represented by someone with a mandate. The U.S., despite Bessent’s absence, has been hush about its strategies for the presidency in the upcoming year, although the country does have plans to decrease the number of non-financial teams and streamline the summit’s agenda.
Trump’s tariff strategies have proved disruptive for international trade regulations. His administration imposes a base tariff of 10% on all imports from the U.S., with targeted rates reaching up to 50% for steel and aluminum, 25% on automobiles, and potential levies on pharmaceutical products. These additional tariffs, scheduled to come into effect on August 1st, will impact more than 20 countries.
Trump’s threat to apply an additional 10% tariff on BRICS nations, eight of which are G20 members, has aroused worries of potential divisions within international organizations. Amidst these chaotic circumstances, an interesting viewpoint emerged from Germany. Its Finance Ministry commented on Tuesday that the Durban meeting would aim to enhance international bonds during these ‘turbulent times’.
South Africa’s Treasury Director General, Duncan Pieterse, stated that despite the circumstances, the group hopes to put forth the first communique during the South African G20 presidency before the meetings conclude. The G20, for the first time since July 2024, has reached a collectively agreed position against protectionism, demonstrating the group’s commitment to finding common ground in the face of global challenges.