RESOLVING THE LEDGER
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China was the only Group of 20 member to dissent from a joint statement that "non-market based economies pushing out a never-ending stream of cheap exports is not sustainable," Treasury Secretary Scott Bessent said Tuesday.
The other G20 members will take action in the coming "days, weeks or months" to "reach a resolution on this unsustainable equilibrium," Bessent said at a press conference following days of meetings with finance ministers and central bankers in Asheville, North Carolina.
The statement, released later Tuesday by the Treasury Department, includes a footnote specifying that China objected to a paragraph in which the 19 members agreed "that countries should take steps to eliminate non-market policies and practices that exacerbate imbalances."
"In particular, countries with excessive and persistent external surpluses should remove distortions that constrain domestic consumption and that result in an overreliance on exports for growth," that paragraph reads.
Treasury said China also objected to a paragraph expressing concern about continuing shipping disruptions in the Strait of Hormuz, a vital oil-shipping route that Iran has effectively blocked amid its war with the U.S.
China further opposed paragraphs praising the International Monetary Fund's "surveillance of global imbalances," and singling out "countries where a meaningful share of external debt is owed to G20 members."
China's U.S. embassy did not immediately respond to CNBC's request for comment on Bessent's remarks about the joint statement.
"I'd hoped to be able to announce a unanimous joint communiqué today," Bessent said at the presser, while stressing that the agreement from the 19 other members "shows the sheer the enormity of the problem."
The remarks came as Bessent spearheads the Trump administration's plan to choke off Iran's economy by threatening its business partners with secondary sanctions, dubbed "Operation Economic Outcast."
The effort has raised questions about whether the U.S. would target China, Iran's top trading partner and its top oil buyer by far. The U.S. is in long-term trade talks with Beijing, and Chinese President Xi Jinping is slated to visit the U.S. in late September.
"With China on Iran, we have more in common than we have differences," Bessent said Tuesday.
"China agrees Iran cannot have a nuclear weapon. China agrees that there has to be free maritime trade in the Strait of Hormuz. China gets 50% of its energy from the Gulf," he said.
"So I believe it's up to China, or incumbent upon China, to work toward a solution," Bessent added. "We will see how they follow through."
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