G20 countries divided over US call to curb excess industrial capacity

The Group of 20 trade ministers largely rejected US calls to curb excess industrial capacity and non-market policies during a G20 meeting, according to the US Trade Representative's office. Only two countries, Mexico and Argentina, signed onto a US-led statement urging more work and cooperation to eliminate goods produced with forced labor from supply chains.

This decision follows the Trump administration's imposition of tariffs on goods from 59 countries and the European Union for alleged failure to enforce bans on forced labor. The US is conducting a second "Section 301" tariff investigation into 16 trading partners, which is expected to result in new duties in the coming months. China objected to a similar G20 statement on forced labor and non-market policies at a finance leaders' meeting in North Carolina a month prior.

China denies that its industrial policies have created excess capacity and blames Western countries for using the issue to justify protectionist measures. The US stated that G20 trade ministers reached agreement on condemning the weaponization of food trade, with members agreeing that such measures should not be used to coerce unrelated geopolitical concessions.

The US also expressed disagreement with the idea of reforming the "most favored nation" (MFN) system of global tariff rates, arguing that the principle has been abused by non-market-oriented economies like China that subsidize industries.