US-Canada dispute escalates after tense G7, Europeans criticise Trump

A handout photo made available by the German Government (Bundesregierung) on 09 June 2018 shows French President Emmanuel Macron (3-L, partially hidden), German Chancellor Angela Merkel (C-L) and Japan's Prime Minister Shinzo Abe (C-R) speaking to US Presidend Donald J. Trump (R, seated) during the second day of the G7 meeting in Charlevoix, Canada, 9 June 2018. [Handout photo/EPA/EFE]

The United States and Canada swung sharply on Sunday (10 June) toward a diplomatic and trade crisis as top White House advisers lashed out at Canadian Prime Minister Justin Trudeau a day after US President Trump called him “very dishonest and weak.”

The spat drew in Germany and France, which sharply criticised Trump’s decision to abruptly withdraw his support for a Group of Seven communique hammered out at a Canadian summit on Saturday, accusing him of destroying trust and acting inconsistently.

“Canada does not conduct its diplomacy through ad hominem attacks … and we refrain particularly from ad hominem attacks when it comes to a close ally,” Canadian Foreign Minister Chrystia Freeland told reporters on Sunday.

Freeland reiterated that Canada would retaliate to US tariffs in a measured and reciprocal way, adding the country would always be willing to talk.

Trump in Singapore on Monday escalated his war of words with Canada and the European Union in a pair of tweets.

Trump said: “Fair Trade is now to be called Fool Trade if it is not Reciprocal” and suggested that Canada was profiting from US trade, citing what he said was a Canadian press release. “Then Justin acts hurt when called out!”

He again suggested the United States was footing too much of the costs of NATO and “protecting many of these same countries that rip us off” on trade. The European Union, he added “should pay much more for Military!”

When Trump left Quebec, it was thought that a compromise had been reached, despite the tension and the determination of European leaders Emmanuel Macron and Angela Merkel to push back against the US president’s protectionist policies.

Officials from European delegations quickly leaked copies of the joint statement, and it was published online moments before Trump tweeted.

On board Air Force One, an AFP reporter was told that Trump had approved the agreement, only to be told later of the tweets. A senior US administration official said that Trump had been angered by Trudeau’s comments.

Trudeau had told reporters that Trump’s decision to invoke national security to justify US tariffs on steel and aluminium imports was “kind of insulting” to Canadian veterans who had stood by their US allies in conflicts dating back to World War I.

“Canadians are polite and reasonable but we will also not be pushed around,” he said.

Trudeau said he had told Trump “it would be with regret but it would be with absolute clarity and firmness that we move forward with retaliatory measures on 1 July, applying equivalent tariffs to the ones that the Americans have unjustly applied to us.”

‘The gig is up’

The joint communique that was thrashed out over two days of negotiations in Canada vowed that members would reform multilateral oversight through the World Trade Organization (WTO) and seek to cut tariffs.

“We commit to modernize the WTO to make it more fair as soon as possible. We strive to reduce tariff barriers, non-tariff barriers and subsidies,” it said, reflecting the typical language of decades of G7 statements.

But Trump had already said he would not hesitate to shut countries out of the US market if they retaliate against his tariffs.

“The European Union is brutal to the United States… They know it,” he insisted in his departing news conference. “When I’m telling them, they’re smiling at me. You know, it’s like the gig is up.”

European officials said Trump had tried to water down the language in the draft communique on the WTO and rules-based trade. In the end, that language stayed in and it was only on climate change that no consensus was reached.

Attacks continue

Trump had arrived in Singapore late on Sunday for the summit with North Korean leader King Jong Un that could lay the groundwork for ending a nuclear stand-off between the old foes.

White House economic adviser Larry Kudlow accused Trudeau of betraying Trump with “polarizing” statements on trade policy that risked making the US leader look weak ahead of the historic summit with Kim.

“(Trudeau) really kind of stabbed us in the back,” Kudlow, the director of the National Economic Council who had accompanied Trump to Canada, said on CNN’s “State of the Union.”

Trade adviser Peter Navarro told “Fox News Sunday” that “there is a special place in hell for any leader that engages in bad faith diplomacy” with Trump.

Trudeau, in Quebec City for bilateral meetings with non-G7 leaders after the summit, did not comment as he arrived.

Trudeau got direct personal support from some European leaders.

British Prime Minister Theresa May “is fully supportive” of Trudeau and his leadership, a senior UK government source said, while European Council President Donald Tusk tweeted: “There is a special place in heaven for @JustinTrudeau.”

French President Emmanuel Macron’s office reacted Sunday by saying that “international cooperation cannot be dictated by fits of anger and throwaway remarks.”

Reneging on the commitments agreed in the communique showed “incoherence and inconsistency,” it said in a statement.

Freeland, asked about support from allies, said: “The position of our European allies, including Japan, is the same as ours. We coordinated very closely with the European Union, with Mexico, on our list of retaliatory measures and actions.”

Europe will implement counter-measures against US tariffs on steel and aluminium just like Canada, German Chancellor Angela Merkel said, voicing regret about Trump’s decision to withdraw support for the communique.

Trudeau’s office said he had not said anything in his closing G7 news conference he had not said to Trump before.

The majority of Canadian exports go to the United States, making Canada uniquely vulnerable to a US trade war.

Canadian officials, including Trudeau, have fanned out across the United States as part of a months-long charm offensive to appeal to pro-trade Republicans at every level. But even those vested in Canadian trade are not expected to come to Trudeau’s defense as long as the US economy is roaring.

“I think the pushback by Congress is going to come up incredibly short,” Chris Barron, a pro-Trump Republican strategist, said of Republican efforts to rein in Trump.

‘Great concern for G7’

Trump’s backing out of the joint communique torpedoed what appeared to be a fragile consensus on a trade dispute between Washington and its top allies.

“The G7 was a forum for friends – democracies with the same value system – to discuss issues of common interest. Now there is a question mark over that. But it did not start with this G7, but with the election of Donald Trump,” said a European official.

Trump also said he might double down on import tariffs by hitting the sensitive auto industry, throwing the G7’s efforts to show a united front into disarray.

“In a matter of seconds, you can destroy trust with 280 Twitter characters,” German Foreign Minister Heiko Maas said when asked about Trump’s U-turn.

France is also standing by the G7 communique, a French presidency official said.

Trump has infuriated the European Union, Canada and Mexico by imposing tariffs on steel and aluminium imports.

“The world as we know it, namely the US-led rules-based multilateralism, is now in serious danger of unraveling, as illustrated at the G7 meeting,” said Erik Nielsen, chief economist at Unicredit Bank.

South African President Cyril Ramaphosa, who met with Trudeau on Sunday, said it was time for G20 nations to play a role and to “also bring about some good sense to all the key players.” “Canada’s Freeland, who met with US Trade Representative Robert Lighthizer on Friday, said she would speak to him later on Sunday, adding that she believed a deal to renew the North American Free Trade Agreement was still possible.

“We are convinced that a modernization is perfectly possible, we are convinced that common sense will triumph,” she said.

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