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G20 finance ministers have been unable to agree a joint communique of their gathering in Cape Town, intensifying questions over the relevance of this body in an era of waning US support for multilateral forums.
The three-day meeting was already under a cloud after ministers from several leading economies — including the US, China, Japan, Canada, India and Mexico — opted out, sending their deputies instead.
South African finance minister Enoch Godongwana, who hosted the talks that concluded on Thursday, said he was “not happy” at the failure to agree a text, after disagreements on a range of issues from climate finance to trade and the threat of US tariffs.
Godongwana was able to issue a basic “chair’s summary” rather than the usual communique that sets out agreements and tasks.
The South African said that while a lack of agreement was not unusual at G20 forums since splits opened over Russia’s full invasion of Ukraine in 2022, “new differences have emerged on a number of topics”.
Pressed to elaborate, he said countries had “a different view on how we manage climate finance”, while declining to name which ones had stymied agreement.
The US has been an outlier when it comes to climate financing — a key pillar of the G20’s priority list — with President Donald Trump’s administration withdrawing $4bn in pledges to the Green Climate Fund, a UN initiative. Trump signed an executive order on his first day in office that withdrew his country from the Paris agreement on climate change.
Another point of contention is the rejection of most G20 nations of protectionism — a key tenet of Trump’s “America first” policy, which has seen him impose tariffs on several nations, including traditional allies. Trump said this week that he planned to impose 25 per cent tariffs on goods from the EU, saying the bloc’s goal was to “screw the United States”.
A European official who attended the G20 meetings told the Financial Times that “harsh words” had been exchanged between European finance ministers and US officials in light of Trump’s threats.
“In many ways, the US was alone,” he said. “Its trade position was on everyone’s lips, with many of the discussions being about US tariffs and what is at stake for multilateralism. In general, the European countries are aligned that this protectionism is bad for the world.”
In the chair’s summary of the talks, released at the summit’s close, the G20 said the discussions “reiterated the commitment to resisting protectionism”, and a commitment to a “multilateral trading system with the World Trade Organization at its core”.
This sets the G20 on a potential collision course with the Trump administration, which will take over the group’s presidency later this year. While the US has not withdrawn from the WTO, it is conducting a review of all the multilateral organisations with which the country is involved.
Trump’s administration has also cooled on the G20, with his finance secretary Scott Bessent joining secretary of state Marco Rubio in skipping the ministerial meeting.
Godongwana played down Bessent’s absence, saying he had sent a note that he would be attending, but withdrew at the last minute after Trump convened a cabinet meeting.
Defence spending was another area of contention, with the US pushing its traditional Nato allies to increase their outlay to 5 per cent of their GDP.
Rachel Reeves, UK chancellor of the exchequer, said she would lobby her European counterparts at the G20 to ratchet up military spending at a “generational moment” for Europe, adding that security was the “bedrock of economic growth”.
One European official, speaking under condition of anonymity, told the FT that there was “general agreement in Europe that defence spending has to rise — but the questions is how, and by how much.”
