German Finance Minister Wolfgang Schaeuble told CNBC on Friday U.S. Treasury Secretary Steven Mnuchin is in favor of open trade policies, as he attempted to ease tensions after recent sparring between the two economic powerhouses. This time, early drafts of the ministers' statement have omitted such unequivocal language, which in the final version could be softened to refer to trade that is "open" and "fair", without the absolute opposition to import restrictions to benefit domestic workers.
Baden-Baden | The world's leading financial ministers are battling to safeguard the Group of 20's commitment to free trade and a rejection of protectionism in the face of opposition from the Trump administration.
Another top priority for Mnuchin at the summit will be addressing currency valuations among the world's 20 top economies.
European stocks moved slightly lower Friday, but hovered around their highest levels in more than a year, with investors turning attention to the meeting of Group of 20 finance officials in Germany.
The new USA administration has argued that excessive bank regulation is saddling lending and holding back growth, raising the prospect that regulation would be rolled back and efforts to finalise a new global accord, called Basel III, would run aground.
Schaeuble's meeting with Mnuchin comes after U.S. President Donald Trump's administration criticized Germany's trade surplus.
Trump has repeatedly emphasized that the US needs a tougher approach to trade that would put American workers and companies first.
"Our objective is getting more balanced trade agreements", he said, confirming that having border taxes is an option.
"Our focus is creating economic growth that is good for the United States and for the rest of the world", Mnuchin said "It is not our desire to get into trade wars, it is our desire to deal with where there is imbalance in certain trade relations". Despite Mr Trump's robust rhetoric against free trade and trading partners, the new U.S. treasury secretary insisted he was more interested in solutions that avoided confrontation.
Mnuchin is scheduled to meet one-to-one with China's Finance Minister Xiao Jie and central bank governor Zhou Xiaochuan. That could include job training and education, since the International Monetary Fund says trade and globalization have benefited higher-skilled workers.