Bessent's chairing of the G20 Finance Ministers' meeting this week faced a "trust deficit," and the "American-style growth agenda" was put under global scrutiny.

On August 31, the G20 Finance Ministers and Central Bank Governors Meeting officially opened in Asheville, North Carolina, USA. As the host, U.S. Treasury Secretary Scott Bensette was expected to take center stage in promoting the global economic growth agenda. However, as he entered the venue, he was met with skepticism from global counterparts, the aftermath of market backlash, and a trust crisis regarding the credibility of U.S. fiscal policy. This summer, Bensette attempted to reshape the trajectory of the global financial market with a "trilogy of interventions"a coordinated intervention in the yen, an expansion of Treasury bond repurchases, and threats of sanctions against Iran. However, these actions not only failed to achieve their intended outcomes but also transformed into piercing questions directed at U.S. fiscal credibility at the table in Asheville. The G20 agenda is facing a "triple fracture": from economic coordination to sanction pressures. The Asheville meeting was supposed to be a critical juncture for coordinating global economic policies. In February of this year, the U.S. Treasury announced G20 priorities that included advancing financial regulatory modernization, enhancing debt transparency, and improving cross-border payments. However, pre-meeting signals indicated a fundamental shift in the agenda's focus. The first fracture: Iran sanctions vs. energy security. Bensette vowed before the meeting to "refocus G20 discussions on promoting economic growth," but multiple media reports suggested he would actually pressure G20 members to align with U.S. sanctions on Iran, severing commercial ties with Tehran. More symbolically, the U.S. imposed restrictions on Egyptian banks in the UAE, citing "connections to Iran," despite Egypt not being a G20 member; this move was widely viewed as a warning of secondary sanctions for those attending. This strategy faces an unavoidable structural contradiction: the Strait of Hormuz handles about one-fifth of the world's maritime oil trade, and its closure has driven energy and commodity prices high, weighing down nearly all G20 economies. For some G20 members, energy security is a dominant domestic political issue. German Vice Chancellor and Finance Minister Lars Klingbeil publicly called for an end to the conflict between the U.S. and Iran and reopening the Strait of Hormuz before the meeting. Josh Lipsky, Chair of the International Economics Council at Atlantic China Welding Consumables, Inc., succinctly captured the sentiment: "Bensette wants to prioritize the Iran issue, discussing strengthening sanctions against Iran, while many G20 members want to discuss just about anything elsesuch as tariffs." The second fracture: tariff wars vs. ally trust. In February, the U.S. Supreme Court ruled that the Trump administration lacked legal authorization to impose global tariffs under the International Emergency Economic Powers Act. However, since then, the Trump administration has attempted to rely on other legal grounds to reimplement these tariffs. In July, 60 economies, including all G20 members, faced tariffs of 10% or 12.5%; 16 major trading partners (more than half of which are G20 members) faced additional threats of tariffs. While Washington demands cooperation in its sanctions against Iran, these countries are already facing trade pressures stemming from the U.S. itself. This dual standard of demanding cooperation on security while imposing economic punishment is severely eroding the foundation of mutual trust among G20 members. The third fracture: $40 trillion debt vs. intervention credibility. On August 19, the U.S. public debt surpassed $40 trillion, approximately double the levels from 2017. Meanwhile, yields on 30-year U.S. Treasuries hit a 19-year high. To address this situation, Bensette announced he would double the scale of long-term Treasury bond repurchases to $4 billion at a time, achieving a brief alleviation of yield pressure but also sparking widespread controversy over claims of de facto quantitative easing. Former Bank of England rate setter Suhail Wadhwani warned, "Trying to fight the market with a squirt gun is probably unwise. Treasury secretaries need to maintain market credibility during periods of economic downturn." Another concern: the "Bensette doctrine" of currency intervention and its impact on global currencies. Bensette's most notable intervention this summera joint effort with Japan on August 1 to support the yennow faces severe tests. Although the coordinated effort succeeded in pushing the yen from around 164 to 155, on Monday (August 31), the yen re-dipped below the 160 mark against the dollar. The U.S. intervened by selling euros to buy yen, without prior notification to European officials, provoking strong dissatisfaction from Europe. One European official stated that this intervention was largely seen as a political gift to Japan rather than an effective economic strategy. In response to the yen falling back below 160, Bensette stated in an interview on Sunday that the recent movement of the yen has been controlled to a considerable degree and was not the disorderly market that triggered the intervention previously. He also expressed expectations that the Bank of Japan would do the right thing with its monetary policy. Nomura Research Institute's Chief Economist, Nobuhiro Kawai, indicated that the yen's dip below 160 and the approaching 3% yield on 10-year Japanese government bonds might prompt Bensette to urge Japan to adopt cautious fiscal policies and raise interest rates during the G20 meeting. Other G20 member countries are grappling with the issue that U.S. policies will inevitably have knock-on effects on the global economy, impacting everyone. Earlier this year, the war in Iran and soaring energy prices contributed to a strong dollar. However, Bensette's recent intervention led to a weaker dollar. Bensette has publicly discussed using the dollar's status as a reserve currency as an economic weapon, compelling both allies and adversaries to yield to Washington's will. The U.S.'s robust and dynamic market, along with its superior currency, has brought immense benefits to partners, but he indicated in June that these benefits are no longer unconditional. Our partnerships now come with expectations, and in some cases, with non-negotiable obligations. Since Bensette's intervention at the end of July, the yen's gains have somewhat diminished, with the exchange rate against the dollar having first dropped to 160 last Friday, creating a new low since the intervention began. However, for G20 member countries like Japan and Argentina that have benefited from Bensette's actions, this U.S. Treasury Secretary remains an important ally. He is very important for Japan, Takahide Kiuchi, an executive economist at Nomura Research Institute and former director of the Bank of Japan, stated, noting that U.S. support for the yen has strengthened ties between Washington and Tokyo. One European official remarked that this intervention was largely perceived as a political gift to Japan rather than an effective economic strategy. The official also mentioned that recent fluctuations in the U.S. Treasury market were primarily driven by domestic factors, such as debt levels and doubts about the pace of productivity improvements from artificial intelligence. Through the Federal Reserve's influence globally: Bensette and Wallerbrother and brother in the power game. Bensette's recent series of aggressive actions has raised deeper questions: as Federal Reserve Chair Waller gradually gains a stable footing after early missteps, who is the most influential economic policymaker in Washington? Nathan Sheets, Chief Global Economist at Citigroup and a veteran of the Federal Reserve and Treasury, provided a vivid metaphor: Right now, I think of Bensette as the older brother, and Waller as the younger brother. However, this brotherhood seems to have foundational differences in priorities. Bensette bears the responsibility of repaying $40 trillion in debt, working to lower borrowing costs; while Waller focuses on controlling persistently high inflation, reaffirming this stance on Friday at the Jackson Hole conference. Jacqueline Rong, Chief Economist for China at BNP Paribas, warned that the divergence between Bensette and Waller weakens the credibility of U.S. institutions, potentially bolstering the Chinese government's determination to diversify overseas asset allocation and accelerate the internationalization of the yuan. Conclusion: A global growth engine or the world's greatest uncertainty? The International Monetary Fund (IMF) projects global economic growth of 3% by 2026 but warns that risks are tilted to the downside. IMF President Kristalina Georgieva likened the world economy to the flagship in The Odyssey that ultimately sankbattling strong headwinds. Before the meeting, Bensette indicated his plan to focus on promoting economic growth at the G20 summit. "The world is tired of hearing us talk about what we don't want," he told the Associated Press on Sunday, "they want to hear what we want." However, as Washington's tariff stick simultaneously strikes allies and adversaries, as the Treasury's bond market interventions incite market panic over financial repression, and as the dollar is wielded as an economic weapon through its status as a reserve currencyBensettes pitch for the American growth agenda is facing a profound deficit of trust. As a senior European official stated, in a context where U.S. actions are destabilizing the world, the impact of any growth initiatives will be limited. The G20 meeting in Asheville is not only a test of Bensette's diplomatic skills but also a key examination of whether the Bensette doctrine can gain acceptance on a global scale.