Trade war looms as US tariffs stir G7 meet

WHISTLER, Canada — The world's largest economies stood at the precipice of all-out trade war yesterday as major US allies announced retaliation against stinging steel and aluminum tariffs that are due to take effect in the coming hours.

President Donald Trump's decision on Thursday not to extend exemptions for Canada and the European Union — the largest US sources of foreign aluminum and steel respectively — upended the agenda for talks among Group of Seven foreign ministers underway in Canada.

As Brussels, Ottawa and Mexico City vowed to impose counter-tariffs on billions in US goods, France said it would not negotiate while the tariffs were in effect, and lawmakers in Trump's Republican Party denounced the move as threat to prosperity and global stock markets sank.

In a call late Thursday, French President Emmanuel Macron told Trump the tariffs were "illegal" and said Europe would respond in a "firm and proportionate manner."

US Treasury Secretary Steven Mnuchin was likewise sure to receive an earful from his G7 counterparts at meetings in a coastal mountain resort in Canada, with raw differences dominating the atmosphere.

Normally the scene of compromise and trade promotion, the G7 meet took on an air of futility as hopes for dialogue all but vanished.

"I'll be stating very clearly our disagreement with the actions they've taken," Canadian Finance Minister Bill Morneau told reporters.

"I have every expectation that our other allies around the table will express the same sentiments."

Earlier Thursday Macron told journalists at the Elysee Palace that he deplored the American decision.

"I think this decision is a mistake in many ways because it responds to existing international imbalances in the worst way — by breaking up and creating economic nationalism.