President Donald Trump shook up a meeting of the leaders of the world’s richest countries with a proposal to eliminate all barriers to global trade, a shift from his aggressive tariff threats ahead of the summit.
Trump headed into the Group of Seven meeting after imposing steel and aluminum tariffs on Canada and Europe and picking fights with some of his fellow leaders. Once on the ground in Quebec, though, he turned the tables on allies who accuse the U.S. of protectionism by offering what his top economic adviser described as a “free trade proclamation.”
The trade spat has dominated the meeting, with Canadian and European leaders threatening retaliatory duties in response to the new U.S. levies on imported metals. Trump fired back, saying the U.S. had been fooled for years by unfair trading barriers and that any country that imposed its own counter-measures would regret it.
“If they retaliate, they’re making a mistake,” Trump said.
Trump’s move creates challenges for the G-7’s other leaders, who are reluctant to eliminate levies they charge on some imported products. The president has long argued for reciprocal trade, meaning that U.S. tariff rates should be equal to other major trading partners’ duties.
“We’re like the piggy bank that everybody is robbing, and that ends,” said Trump.
German Chancellor Angela Merkel said that she agrees with Trump’s push for freer trade, adding talks over crucial changes to global trading rules will keep moving ahead.
“We also agreed that we want to reduce tariffs and remove trade barriers and also to reduce subsidies,” Merkel said at her closing press conference. “Many of the current discussions about trade, especially with the U.S., despite the common commitment, will continue.”
Trade Truce
Merkel is proposing a forum—a “shared evaluation mechanism”—aimed at defusing the tensions with the U.S. The idea has the backing of other European members, though it’s unclear if it will get support from the Trump administration.
A German government official said the plan would see direct talks between the EU and the U.S. start straight away, and last around two weeks, focused on how much, or whether, EU trade policy endangers U.S. national security interests. It would include outside experts.
Merkel said she expects that all G-7 nations will sign a final joint statement, although disagreements still remain over the wording around trade, Iran and Russia. The U.S. isn’t expected to join separate agreements for cleaner oceans or combating climate change, which the other six nations will sign, Merkel said.
