BCN-03 Trade spat looms as Trump heads for hostile G7

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ZCZC

BCN-03

G7-SUMMIT-TRADE

Trade spat looms as Trump heads for hostile G7

QUEBEC CITY, June 8, 2018 (BSS/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 went on to allege that Canada’s tariffs on US dairy products “are
hurting our Farmers, killing our Agriculture!”

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.

– All-out trade war –

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.

Despite the threat that tensions over trade could tear the Western alliance
apart and damage the cause of globalization and free trade, the usual group
of anti-capitalist protesters gathered.

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 400 protesters had gathered in the provincial
capital anyway on Thursday night, and were confronted by a large police
operation to contain them.

As night fell crowds gathered near the conference media center, some of
them burning G7 flags and assaulting journalists.

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.

BSS/AFP/MRI/0852 hrs