US Treasury's Bessent Confronts G20 on

US Treasury Secretary Scott Bessent is confronting a significant diplomatic challenge this week. He is urging finance ministers from the G20 major economies to reduce global trade imbalances, boost growth, and sever business ties with Iran, according to a Reuters report. The meetings in Asheville, North Carolina, occur amid uncertainty over new US tariffs, a trade war with Canada, and economic pressures from the ongoing conflict with Iran.

Bessent aims to reshape the G20 under US leadership after the country skipped last year's forum in South Africa. The unresolved war has kept the Strait of Hormuz closed, harming growth across nearly all G20 economies. The Treasury Secretary has warned that countries continuing to buy Iranian oil or facilitate transactions with Tehran face secondary US sanctions.

Trade Tariffs and Imbalances

The Trump administration's tariff strategy is central to its goal of shrinking trade imbalances. A senior Treasury official cited distortive government policies that prevent fair competition as a cause. All G20 countries and the European Union were among 60 economies hit with US tariffs of 10% or 12.5% in July for allegedly lax enforcement of forced labor bans. Sixteen major US trading partners are also facing potential tariffs over alleged excess industrial capacity.

European officials are concerned about a surge of Chinese exports threatening industries like autos. China's exports rose 23.9% year-on-year in July. High US tariffs and a ban on Chinese vehicles have redirected this flood toward Europe, sparking calls for tougher EU import curbs. However, China has shown little interest in reducing industrial subsidies or rebalancing its economy toward domestic demand.

US Debt and Market Interventions

Economists note the US has shown little interest in reducing its own fiscal deficits, which would curb import demand. Total US public debt surpassed $40 trillion on August 19. Markets are growing nervous about the debt trajectory, with yields on 30-year Treasuries reaching 19-year highs this month.

Bessent surprised markets by announcing a doubling of scheduled longer-dated Treasury buybacks to $4 billion per operation. A senior Treasury official stated the long-bond yields had risen above what the US considers fair value and that the Treasury is committed to lowering them. This interventionist move has raised concerns among some central bankers.

Bessent's market tactics have also involved currencies. The US conducted a joint intervention with Japan to support the yen on August 1 and purchased Argentine pesos in October 2025.

Diplomatic Hurdles

Analysts predict discord at the G20 meeting. Josh Lipsky of the Atlantic Council said many countries will want to discuss tariffs, not Iran. Former US Treasury official Mark Sobel stated G20 ministers will not be swayed by soothing words. Their economies are being hurt by a war on Iran they do not support, Sobel said, adding that no amount of US diplomacy can change that reality.

The US push for growth, anchored by deregulation, increased energy production, and private innovation, seeks to return the G20 to its economic roots. The forum last took major collective action in 2020, agreeing to inject $5 trillion globally to combat COVID-19 losses.