Australia says US-China trade tensions are hurting local economy

The G20 nations have issued an unprecedented warning about trade tensions, warning of “collateral damage” to economies including Australia’s.

The G20 nations, including Australia, have issued a stern warning to the US and China to ease trade tensions or risk a return to unilateralism and protectionism.

The Australian reports that the treasurers and finance ministers of countries including Australia, Canada, Indonesia and Singapore, have published a statement calling for an end of the trade war.

“At this moment, rising trade tensions are a serious concern. While we acknowledge that there are legitimate issues that must be addressed, the risks of collateral damage are growing,” the statement said.

US President Donald Trump and China's leader Xi Jinping. Picture: AFP

Australian Treasurer Josh Frydenberg helped pen the letter as the trade battle between the US and China continues to hurt the economy with fears prolonged tensions would be further damaging.

The G20 leaders cited the Bretton Woods system agreed to after WWII, which proposed a “financial safety net” to ensure the shared financial success of countries.

“As beneficiaries of this system­, we have a responsibility to safeguard the institutions that have led to our shared economic success. We need to work together to forge consensus on pressing global challenges,” the statement said. “Uncertainty over the outlook is contributing to a slowdown in trade and manufacturing activity. We have seen a return of financ­ial market ­volatility, ­currency instab­ility and ­decreased capital flows to ­emerging econo­mies. Dampened global trade conditions are affecting investor confid­ence, business investment and productivity.

“Growth has slowed and risks remain tilted to the downside. The World Bank and the IMF continue to revise down their economic growth forecasts,” the statement went on to say.

Chinese made televisions for sale at a store after US import tariffs rose more on $100 billion in Chinese goods. Picture: AFP

“Collectively, we need to take steps to reverse this course. We need to champion the rules-based multilateral system.

“While respecting each ­country’s domestic priorities, we should be clear that protecting free and open markets will ensure stronger growth and greater prosperi­ty for all.

“We must not resort to unilateralism and protectionism. Pursuing confrontation over dialogue will only exacerbate risks, erode confidence and weaken the prospect of global economic recovery.”

Us President Donald Trump has agreed to delay a lift in ­tariffs on $US250 billion ($A364 billion) worth of Chinese goods by two weeks as a gesture of “goodwill”.

To read more visit The Australian