- President Donald Trump fought with the other G7 leaders during this past weekend’s summit in Canada.
- Trump engaged Canadian Prime Minister Justin Trudeau in a war of words and promised to continue recent trade protectionism.
- Experts say the Trudeau spat and the likelihood of tariffs from the European Union and Canada will result in a trade war.
President Donald Trump’s shortened stint at the G7 summit threw the international trading order into chaos and most likely put the US on the path to a trade war.
In a dizzying 48-hour period, Trump refused to sign on to the official G7 statement, aired grievances with other leaders on trade, and attacked Canadian Prime Minister Justin Trudeau is a series of tweets after leaving the summit early.
“PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around,'” Trump tweeted. “Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”
The blowup drew rebukes from almost every other member of the G7 – a group containing the US, the UK, Canada, France, Germany, Italy, and Japan – and raised the possibility for more back-and-forth trade restrictions.
“The burning tire fire that became the G7 is not surprising given rising trade tensions and President Trump’s distaste for these global conclaves,” said Chris Krueger, an analyst at Cowen Washington Research Group.
Trade war of words
The G7 meeting was expected to be tense after Trump’s decision to impose steel and aluminium tariffs on Canada, Mexico, and the European Union. But the diplomatic fireworks ended up even more spectacular than anticipated.
While Trump also presented the idea that the member countries should drop off tariffs and trade barriers, he also reportedly complained to the other leaders about their trade policies and said the US would continue with tariffs absent concessions.
Trudeau responded with tough words of his own at a press conference later Saturday, reiterating that Canada would move forward with a slew of tariffs in response to Trump’s steel and aluminium tariffs.
“Canadians, we’re polite, we’re reasonable, but we also will not be pushed around,” Trudeau said.
Following Trudeau’s statement, Trump tweeted that the US would not sign on to the summit’s official communique – a largely symbolic but still largely unprecedented move.
Trump wasn’t alone in attacking Canada: Two of the president’s highest-ranking economic advisers also joined in. Larry Kudlow, the National Economic Council director, said Trudeau “kind of stabbed us in the back” during the closing press conference. Peter Navarro, Trump’s most protectionist trade adviser, said there was “a special place in hell” for Trudeau after what he called the prime minster’s “stunt press conference.”
Krueger said the strong words most likely reflected the president’s thinking.
“The reactions from White House Trade Czar Peter Navarro and NEC Director Larry Kudlow are so outsized it would seem that Trump himself was apoplectic when he heard/saw the comments from Prime Minister Justin Trudeau and that Navarro and Kudlow were speaking to an audience of one on instruction,” he said.
Outside the Trump-Trudeau dustup, other G7 leaders also expressed displeasure with Trump’s hardline approach.
“The withdrawal, so to speak, via tweet is of course … sobering and a bit depressing,” German Chancellor Angela Merkel said Sunday in a TV interview.
French President Emmanuel Macron’s office also slammed Trump’s decision to reject the official communique and denounced the US president’s negotiating tactics.
“International cooperation cannot be dictated by fits of anger and throwaway remarks,” Macron’s statement said.
‘The trade war will get worse’
Given Trump’s harsh words at the summit, most experts believe that the trade fight initiated by Trump’s steel and aluminium tariffs will only intensify.
Greg Valliere, the chief global strategist at Horizon Investments, wrote Monday that the back-and-forth would most likely only cement the resolve of both Trump and Trudeau.
“Canada will impose more tariffs; the trade war will get worse before it gets better,” Valliere said.
Similarly, Krueger said Trump was unlikely to take the countermeasures lying down and could hit back with more trade restrictions.
“The G7 and continued war of words also increase the likelihood that the 232 steel and aluminium tariffs remain in place, the Mexico/Canadian retaliation tariffs will go live later this summer, and Trump is likely to threaten a counter-retaliation,” he said.
Trump has already kick-started an investigation into auto imports, which could result in tariffs on foreign vehicles. More measures could be in the pipeline.
Richard Haass, the president of the Council on Foreign Relations, warned that Trump’s defiant stance was likely to isolate the US and end in failure.
“America First is truly America alone,” Haass tweeted following Trump’s press conference. “The problem is that unilateralism cannot succeed given the nature of the challenges we face in the world. @realDonaldTrump is alienating the only partners we have and need. Petulance is an attitude not a policy.”
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