G20 finance chiefs to meet under tariff cloud in South Africa

By Admin

17 Jul, 2025

Global Cooperation Faces Test in Durban

The G20 finance ministers and central bank governors are set to convene this Thursday in the coastal city of Durban, South Africa, amidst growing global economic uncertainties. The meeting unfolds under the looming threat of former U.S. President Donald Trump’s aggressive tariff policies and a deepening divide among global powers   especially in the wake of Russia’s ongoing conflict with Ukraine and ensuing Western sanctions.

A Club at Crossroads

The G20, once a beacon of international economic cooperation during the global financial crisis, has increasingly struggled to find consensus on pressing issues. Fragmentation has grown more pronounced, not only due to geopolitical tensions but also due to absenteeism among key members. U.S. Treasury Secretary Scott Bessent will miss the Durban summit   his second absence from a South African-hosted G20 event this year. In his place, Michael Kaplan, acting undersecretary for international affairs, will represent the United States.

Other notable absentees include finance ministers from India, France, and Russia, raising questions about the effectiveness and influence of this year’s gathering. However, South Africa’s central bank governor, Lesetja Kganyago, dismissed concerns about attendance, emphasizing the importance of representation. “What matters is, is there somebody with a mandate sitting behind the flag?” Kganyago noted.

Tariffs and Tensions

Trump’s proposed tariffs are causing global ripples. With baseline tariffs of 10% on all U.S. imports and significantly higher rates on key sectors such as steel (50%), autos (25%), and pharmaceuticals, global trade faces a potential upheaval. Tariffs targeting more than 20 countries are slated to come into effect on August 1. Particularly concerning is Trump’s threat to impose additional 10% tariffs on BRICS nations   eight of which are G20 members   potentially straining the group’s cohesion.

German finance ministry sources stressed the need for solidarity in these "turbulent times", while South Africa's presidency of the G20   under the theme "Solidarity, Equality, Sustainability"   has tried to reorient the group’s focus towards African priorities such as climate finance and the high cost of capital in developing nations.

Challenges and a Scaled-Back Presidency Ahead

Despite internal divisions, South African officials remain optimistic. Treasury Director General Duncan Pieterse indicated that efforts are underway to issue the first official communique of their presidency by the meeting’s conclusion   a notable ambition given the group’s track record of discord.

The last unified communique was issued in July 2024, cautiously advocating resistance to protectionism without addressing Russia’s war in Ukraine. This year’s attempt could mark a pivotal moment for the group’s relevance.

Looking ahead, the U.S. is slated to assume the G20 presidency at year-end. Though Washington has shared few public details, insiders suggest a leaner format with fewer non-financial working groups and a streamlined summit schedule. Brad Setser, a senior fellow at the Council on Foreign Relations and former U.S. official, remarked, “It’s expected to be kind of a scaled-back G20 with less expectation of substantive outcomes.”

Conclusion

As the world grapples with trade upheavals and geopolitical uncertainty, the Durban summit is a critical opportunity for G20 leaders to reaffirm their commitment to dialogue and coordinated action. Yet, with key players absent and trade tensions mounting, the path to consensus remains steep.

Whether the G20 can move beyond symbolic gestures and deliver concrete cooperation   especially on global issues like climate financing and inclusive growth   remains to be seen.