Finance minister Enoch Godongwana and US treasury secretary Scott Bessent finally got to meet under the auspices of the Group of 20 during a debate in Washington this week on the future of the global economy, where countries broadly rejected protectionist trade policy.
Bessent’s absence from the G20 meeting of finance ministers and central bankers in Cape Town in February stoked speculation that Godongwana was snubbed by his US counterpart due to heightened tensions between Washington and Pretoria, though it also clashed with a US cabinet meeting called by President Donald Trump on short notice.
"He did attend last night’s session," Godongwana said of Bessent. "Contrary to what people expect he was not largely contradicting anything that was already [out there]. [It was] more on the rationale for what the Trump administration is trying to do on tariffs. The stuff that you already know."
Much like the February G20 finance track meeting, this week’s did not produce a communiqué — standard procedure for a sectoral G20 meeting — but instead relied on a "chair’s summary".
Asked why the meeting did not produce a communiqué, Godongwana said it had been established as standard practice since 2022 that in the absence of a communiqué "we will issue a chairman’s statement".
"We took a conscious decision ... that if we don’t issue a communiqué it’s standard practice. Since Indonesia, after the Russian invasion of Ukraine ... there has been difficulty in the finance track to issue a communiqué."
Reserve Bank governor Lesetja Kganyago said members at the meeting supported an open, rules-based and transparent trading system with the World Trade Organisation at its core.
They said regulatory reforms in the trade system had borne fruit and shielded the market.
The meeting agreed that the IMF should play a role in assessing country-specific policies and efforts were needed to take action to de-escalate current trade tensions and volatility, as tariffs were regarded as "a tax without revenue", he said.
"We did reflect on the current economic developments and the extent of the uncertainty that engulfed the financial markets as a result of the trade measures that had been taken, with respect to the impact on trade and the response in the form of tariffs and what that ... meant for financial stability."
There was consensus that the great inflation of 2022 was winding down, while some central banks were further away than others from the point where the disinflation process slowed down enough to ease the monetary approach.
Said Kganyago: "I don’t negotiate trade agreements, ministers do. But basically, the point here is that the tit-for-tat that takes place means that we might ... not be talking to each other [and] that we might need to ... open the dialogue and talk to each other.
"We are coming to the point where tensions have become so elevated that even when a hand is being extended so that one country is reaching out, we might not see that hand because things have become so tense."
Trevor Manuel, who chaired the G20 finance track’s high-level panel on Africa, said the 24-member panel hoped to conclude a "not [necessarily] complete, but reasonable" report by the end of August that would be made available to G20 heads of state.
Paul Calvey, partner and the South Africa lead at Oliver Wyman, said the South African private sector’s involvement within the B20 was vital for driving economic growth initiatives.
"The impact of US tariffs, including the risk of global trade deceleration, could generate substantial uncertainty for businesses and reduce consumer confidence, potentially leading to a decline in spending if businesses transfer increased costs to consumers."
He said the G20 and B20’s success would depend on their ability to build consensus among their diverse membership and engage effectively with G20 governments to promote a more stable and predictable global trade environment.
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