A bimonthly magazine on international affairs, edited in Germany's capital

The G20 to End all G20s

The format’s survival is not worth caving in to Donald Trump’s bullying.
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Rising tensions between the erratic US president and his European counterparts could cause this week’s summit in Hamburg to end in disaster. But EU leaders would be wrong to placate Trump in order to keep the G20 alive.

© REUTERS/Hannibal Hanschke

In November 2008, as the global financial fire sparked by the collapse of Lehman Brothers threatened to burn out of control, the leaders of the world’s twenty biggest economies met for the first time.

Desperate to get a handle on the unfolding crisis, they decided to transform the G20, a largely irrelevant grouping founded in 1999 which had never before conducted a leaders’ summit, into the main economic council of wealthy nations, replacing the G8 (now the G7).

A decade later, the now-annual summits have become just that. But the destabilization of old alliances caused by the election of Donald Trump in America could mean that this year’s summit in Hamburg, which begins on July 7, could be the last – or, at least, the last at which G20 is a body of any significance.

Germany, which currently holds the rotating presidency of the group, is hoping to avoid this outcome. But reports in the German media this week paint a picture of a government worried that the escalating tensions between the United States and the European Union on trade, climate, financial regulation, defense, and security could result in an explosive summit that could lead to the G20’s demise.

German Chancellor Angela Merkel does not want to be remembered as the leader who hosted the last G20. Yet the fate of this summit does not rest in her hands alone: All eyes will be on Donald Trump to see if he comes to Hamburg feeling conciliatory or belligerent. If his recent domestic behavior is any indication, it is likely to be the latter.

An “Arena”, Not a “Community”

The reason for the G20’s designation as the world’s main economic council a decade ago is now being challenged by the very country that pushed for it. The George W. Bush administration in 2008, along with other leaders at the time, wanted a coordinated global response to the financial crisis. The G20 agreed to launch economic stimulus programs in order to steer the world out of danger. They also agreed on regulations to avoid bank collapses, and to eradicate tax evasion.

However, all of these collaborations are now under threat. In May, Trump’s national security adviser H.R. McMaster and his economic adviser Gary Cohn wrote an op-ed for the Wall Street Journal in which they outlined a new vision of the global economy. This vision is not one of a “global community” as envisioned by bodies such as the G20, but of an “arena” in which countries compete. Trump and the Republican-controlled US Congress have already set about dismantling the legislation put in place in 2008 and 2009 to avoid a repeat of the economic crisis.

Washington Turns its Back

Trump’s pronouncements on trade have been as perplexing as they have been hostile. During a visit to NATO in May, he called the Germans “bad, very bad” for their trade surplus with the US. The Trump administration is considering introducing a “border adjustment tax” on imports of German products.

The administration has also threatened to take action against the EU’s long-standing ban on imports of hormone-treated meat from the US, threatening to put tariffs on imports from a number of European products unless Brussels agrees to end the ban. A conflict over steel imports remains equally beguiling, with some speculating that the administration may even announce import tariffs on steel during the Hamburg summit as a gesture of intimidation.

Any of these moves would result in retaliatory action from the EU and other partners such as China and India. They would create an atmosphere of hostility which could make the G20 unworkable as a body. If the free-trade goals of the group are going to be torn up by the very country that initiated it, its continued existence would be in doubt.

Further, whatever its practical implications, the symbolic message of Trump’s decision to pull out of the Paris climate accord is that the US is no longer interested in international cooperation. The climate agreement may be able to survive without the US, but the G20 cannot.

Add in disagreements over sanctions against Iran, the civil war in Syria, North Korean nuclear activity, Russian gas pipelines, and immigration, and you have a recipe for disaster in Hamburg.

European Response

Should the US president come to Germany ready for war, European leaders have two options: they can fight back, or they can placate Trump in an effort to save the G20.

Public polling of Europeans shows they are not in a mood for conciliation. A recent Pew research study shows approval ratings for America throughout the world have plunged to unprecedented lows since Trump took office.

In Europe, opinions are particularly stark. Three-quarters of the world has little or no confidence in Trump. Only 6 percent of Germans think Trump is qualified to be US president, and 91 percent see him as arrogant. Trump’s planned meeting with Russian President Vladimir Putin on the sidelines of the Hamburg summit will not help impressions that the US president is working against the EU.

Earlier this week, Guy Verhofstadt, the leader of the group of Liberals in the European Parliament and a former prime minister of Belgium, wrote an op-ed calling for Europe to show a united front in the face of any Trump bullying in Hamburg. But he noted that such unity will be challenging, as there is a stark East-West divide in Europe on the subject. Western continental Europe is much more eager to cast off American dominance than Eastern Europe or the United Kingdom, with the former still viewing Washington as the more reliable partner than Paris or Berlin.

Merkel’s tightrope walk this week will be to maintain European unity while giving the fewest concessions possible in order to keep the US president calm. The goal is to save the G20 as an organization of cooperation. But there are many in Europe and elsewhere who believe that if saving the group means giving in to Trump’s unpredictable demands, that is not a price worth paying.