G20 countries should consider more trade barriers on China to cut imbalances, Bessent says
Ahead of a G20 finance leaders meeting, the US Treasury Secretary said G20 countries should consider imposing more trade barriers on China to address global trade imbalances.
He characterised the current volume of Chinese exports as unsustainable, while noting the direct US-China trade position was "rapidly improving."
The remarks came ahead of the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting hosted in Asheville, North Carolina, under the United States' 2026 G20 presidency.
The call reflects a broader push to encourage a coordinated multilateral response to China's export-led growth model, rather than reliance on bilateral tariff measures alone.
The G20 and Its Finance Track (FMCBG)
The G20 (Group of Twenty) is the premier forum for international economic cooperation, formed in 1999 in response to the late-1990s Asian financial crisis, initially as a meeting of finance ministers and central bank governors from 19 countries plus the European Union. It gained a Leaders' Summit track from 2008, during the global financial crisis, when leader-level coordination was added atop the original finance-ministerial structure.
Key Details
- Original members (1999): the G7 (US, UK, France, Germany, Italy, Japan, Canada) plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, and the European Union — 19 countries plus the EU.
- The African Union was admitted as a full member in 2023 (under India's G20 presidency), making the grouping 21-strong (19 countries + EU + AU).
- The G20 Finance Ministers and Central Bank Governors (FMCBG) track runs in parallel with the Leaders' Summit track, meeting multiple times a year to prepare communiqués on macroeconomic coordination, financial regulation, and debt issues for leader-level endorsement.
- The G20 presidency rotates annually among members; the United States holds the 2026 presidency, hosting Finance Track meetings in Washington D.C. (April), Asheville, North Carolina (August-September), and Bangkok (October), ahead of the Leaders' Summit in Miami in December 2026.
The call for coordinated trade barriers on China was made ahead of a G20 FMCBG meeting — the very forum whose original 1999 mandate was to promote macroeconomic and financial stability among the world's largest economies, making it the natural venue for pushing a multilateral (rather than purely bilateral) response to a systemic imbalance.
Global Trade Imbalances and China's Export-Led Growth Model
A "trade imbalance" refers to a persistent, large gap between a country's exports and imports, which in China's case reflects weak domestic consumption relative to production capacity ("overcapacity"), channelling surplus output into export markets. Economists and multilateral institutions have flagged this as a source of friction because it can depress prices, market share, and manufacturing employment in trading partners' economies.
Key Details
- China's goods trade surplus reached a record USD 1.2 trillion in 2025, driven by exports of roughly USD 3.8 trillion (up about 5.5% year-on-year) against largely stagnant imports.
- China's trade surplus was estimated to exceed 1% of world GDP in 2025 — roughly double the peak shares recorded historically by Japan or Germany.
- International Monetary Fund officials have urged China to rebalance its economy away from export-led growth toward domestic consumption, citing both structural overcapacity and RMB undervaluation as contributing factors.
The Treasury Secretary's remarks reflect this same rebalancing critique — his stated view that "the world cannot have a China with a $1.2 trillion trade surplus" mirrors the IMF's diagnosis, framing the issue as one requiring coordinated G20-level action rather than unilateral tariffs alone.
Trade Remedy Measures: Tariffs, Anti-Dumping, and Countervailing Duties
Under WTO rules, countries can respond to import surges through several categories of "trade barriers": ordinary customs tariffs (bound under GATT schedules), anti-dumping duties (where goods are sold below fair/home-market value), and countervailing duties (offsetting foreign government subsidies). Coordinated barriers across multiple G20 economies — rather than one country's bilateral tariffs — could reduce the risk of Chinese export volumes simply diverting to less-protected markets.
Key Details
- The WTO's Anti-Dumping Agreement and Agreement on Subsidies and Countervailing Measures (SCM Agreement) set the legal framework for such measures, requiring an investigation establishing injury to domestic industry.
- A recurring pattern noted by analysts is "trade diversion": when one major market (such as the US) raises tariffs on Chinese goods, exports are often redirected to other markets, including Europe and Latin America, rather than reduced overall — the underlying rationale for seeking a coordinated, multi-country response.
- India itself has used anti-dumping and safeguard duties against various Chinese goods (e.g., steel products, solar cells) under its own WTO-consistent trade remedy framework, administered by the Directorate General of Trade Remedies (DGTR).
The suggestion that G20 countries "consider more trade barriers" implicitly points toward this kind of coordinated trade-remedy approach — using WTO-compatible tools across multiple economies simultaneously to prevent Chinese export overcapacity from simply being absorbed by whichever market has the lowest barriers.
- China's 2025 trade surplus: a record USD 1.2 trillion, on exports of about USD 3.8 trillion (up ~5.5% year-on-year).
- China's trade surplus was estimated to exceed 1% of world GDP in 2025.
- G20 formed: 1999 (finance track), Leaders' Summit added 2008; 19 countries + EU + African Union (admitted 2023) = 21 members/entities.
- 2026 G20 presidency: United States; Finance Track meetings held in Washington D.C. (April 2026), Asheville, North Carolina (Aug 29-Sep 1, 2026), and Bangkok (October 2026); Leaders' Summit scheduled for December 2026 in Miami.
- Trade remedy instruments under WTO law: anti-dumping duties, countervailing duties, and safeguard measures, distinct from ordinary bound tariffs.