US officials protest to Germany over currency intervention criticism at heated G20 meeting

The G20 finance ministers’ meeting in Asheville, North Carolina was supposed to focus on global economic growth. Instead, it turned into a diplomatic food fight between Washington and Berlin, with currency intervention, Russia’s reappearance, and US tariffs all serving as flashpoints.

US officials formally protested to Berlin after Germany’s delegation publicly criticized Washington on two fronts: Treasury Secretary Scott Bessent’s decision to sell US euro holdings to prop up the Japanese yen, and the Trump administration’s decision to invite Russian Finance Minister Anton Siluanov back to the table.

The currency fight

At the center of the economic dispute is a move by Bessent that caught European partners off guard. The Treasury sold US euro holdings to support the yen, a unilateral currency market intervention conducted without prior consultation with European counterparts.

Bundesbank President Joachim Nagel took particular issue with the operation. Selling euro-denominated assets to bolster a third currency, without so much as a heads-up to the central bank responsible for that currency, is the kind of move that erodes trust between financial partners.

European economies are already grappling with the effects of US tariff policy and market disruptions tied to the Iran conflict. Having the world’s reserve currency manager actively intervene in forex markets without coordination adds another layer of uncertainty to an already fragile eurozone outlook.

Russia returns to the room

Siluanov’s attendance at the August 31 to September 1 meeting marked his first in-person appearance at a G20 gathering since Russia’s invasion of Ukraine in February 2022.

German Finance Minister Lars Klingbeil called Siluanov’s presence “quite troubling” and led an effort among European delegates to block the Russian minister from appearing in the traditional group photo. That effort succeeded.

Bigger picture: a fracturing partnership

US tariffs were a recurring point of contention during the discussions. European participants raised concerns about the adverse impact of American trade policy on eurozone economies, which are already navigating slower growth and elevated energy costs. The market disruptions stemming from the Iran conflict added another variable that European finance ministers argued was being inadequately addressed by US leadership.

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