Trade spat looms as Trump heads for hostile G7

French President Emmanuel Macron (L) and Canadian Prime Minister Justin Trudeau (R) presented a common front in Ottawa before heading to the G7 summit
AFP

Quebec City (AFP) – Europe and hosts Canada warned US President Donald Trump on Thursday that they will not be intimidated at the G7 summit, despite fears that a trade war will weaken the Western alliance. 

With the leaders of the Group of Seven industrialized democracies due in Quebec, Canada’s Prime Minister Justin Trudeau warned the US leader that they would not roll over on trade tariffs.

And France’s President Emmanuel Macron, who met Trudeau in Ottawa before they headed on to the summit, said he would rally support from his British, German and Italian counterparts before they all sit down with Trump.

“The American President may not mind being isolated, but neither do we mind signing a six country agreement if need be,” Macron tweeted in English, turning to the medium Trump has made his own.

“Because these six countries represent values, they represent an economic market which has the weight of history behind it and which is now a true international force.”

Trump, of course, responded in kind.

“Please tell Prime Minister Trudeau and President Macron that they are charging the US massive tariffs and create non-monetary barriers,” he tweeted. 

“The EU trade surplus with the US is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.”

Trump, who met with Japanese Prime Minister Shinzo Abe in Washington before the summit, may be more preoccupied with next week’s historic nuclear summit with North Korean leader Kim Jong Un.

But before leaving Washington, he made clear that he too has no intention of backing down on his plan to rebalance trade by imposing tariffs on steel, aluminum and other goods imported from US allies.  

So great is the rift between traditional allies that some observers have suggested renaming the G7 summit the G6+1 — and Macron said they should not hesitate to reach agreements without Trump.

But observers point out that the group has never before failed to agree on some form of final communique, even in 1985, when they were likewise divided over trade.

– All-out trade war –

Whatever the internal division between the Western leaders, the summit is also likely to face the usual external protests.

The main meetings will be held two-and-a-half hours north of Quebec City — and of the international media center housing most of the reporters following the summit — in La Malbaie, Charlevoix.

But a small group of around 200 anti-capitalist protesters had gathered in the provincial capital anyway on Thursday night, amid a large police operation to contain them.

As night fell on the downtown Parc des Braves the situation remained peaceful. 

Germany’s Chancellor Angela Merkel had already admitted it will be difficult to even agree on wording for the traditional joint communique at the two-day meeting.

Merkel said Wednesday there would be “no compromise for its own sake” and dropping the statement “may be the more honest way.”

Canada’s Trade Minister Francois Philippe Champagne was even more blunt, declaring: “What we are seeing is that the world economic order is under pressure, under attack.”

Top White House economic advisor Larry Kudlow opposed tariffs before joining Trump’s team, but now says he agrees the trade status quo hurts America.

“Until we can have reciprocal relationships, we will not have free trade, and we will not have fair trade,” Kudlow said.

– End of the world order –

The G7 developed in part because the world’s rich powers — despite their Cold War victory — became frustrated working through the broader multilateral system with lesser rivals.

The globalized economy they helped build had both winners and losers but, until Trump’s election, the United States was seen as the system’s uncontested leader and a major beneficiary. 

But since coming to office in January 2017, Trump has pulled the US out of the Paris climate accord, the Iran nuclear deal and the TPP Pacific free trade deal.

The summit begins Friday in La Malbaie, in Charlevoix, north of Quebec, and runs until Saturday, when Trump flies on to Singapore.  

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