National Post (Latest Edition)

Trump’s tariffs shift Morneau’s pre-G7 agenda

‘Absurd’ that Canada is security risk

- Andy Blatchford

WHISTLER, B.C. • The Trump administra­tion’s “absurd” tariffs on steel and aluminum sent protection­ism rocketing to the top of Bill Morneau’s G7 agenda Thursday as he and his fellow finance ministers from the exclusive club of rich countries braced for the inevitable economic impact.

With his pre-selected program shoved aside, Morneau made it clear the discussion­s in British Columbia’s Coast Mountains will have little choice but to focus on U.S. President Donald Trump’s widely denounced trade offensive against Canada and other G7 allies.

The American move — which prompted retaliator­y measures from Canada and others — threatens to drive a powerful wedge into the G7, and could fracture the long-standing multilater­al relationsh­ip into something observers describe as a “G6 plus one,” with the U.S. as the outlier.

This week’s three-day pre-G7 gathering, which got underway Thursday, will “absolutely” now be focused on trade, thanks to a U.S. tactic that’s widely seen as the death knell for jobs on both sides of the Canada-U.S. border.

“We think it’s absurd that Canada is considered in any way a security risk, so that will be very clearly stated by me,” Morneau said of the U.S. decision to justify the tariffs on the basis of national security. “I have every expectatio­n that our other allies around the table will express the same sentiment.”

Morneau said he expects the G7 to keep pressure on the U.S., hoping to force it to reconsider — and he fully expects the effort to continue at next week’s leaders’ summit in Quebec’s Charlevoix region. The summit will be Trump’s first visit to Canada as president.

In addition to Canada and the U.S., the other G7 countries are Japan, the U.K., France, Italy and Germany.

The Whistler meetings will also give Morneau and other G7 ministers an opportunit­y to hold face-toface discussion­s with U.S. Treasury Secretary Steven Mnuchin, with whom Morneau was scheduled to hold a 30-minute bilateral meeting late Thursday.

He spoke of his “strong” relationsh­ip with Mnuchin, but even friends have disagreeme­nts, he noted.

“When we face challenges, we can’t get through them without talking,” said Morneau, who attended Mnuchin’s wedding last year.

“We’re not saying there won’t be frictions, we’re not saying that we won’t have strong words.”

Earlier in the day, the bombshell news was hard to miss, even if a panel of prominent economic and political leaders did their level best to avoid it. During one particular Q and A, the panellists largely steered clear of direct questions about the U.S. tactic and its likely consequenc­es.

Instead, they strenuousl­y defended he G7, stressing its role as an important leader that, for example, helped the world economy avoid a second Great Depression about a decade ago.

“Thank you, Amanda, for lobbing that grenade my way — I’ll try and jump on it,” joked Bank of England Governor Mark Carney, a former Bank of Canada governor, as moderator Amanda Lang tried to broach the subject.

The panel also featured Internatio­nal Monetary Fund managing director Christine Lagarde, former prime minister Paul Martin and Tiff Macklem, a former senior deputy governor of the Bank of Canada.

“At the end of the day, if trade is massively disrupted, if the level of trust of the economic actors amongst themselves is severely damaged — first of all, those who will suffer most are the poorest, the less privileged people,” Lagarde said.

Trump had extended tariff exemptions for Canada and others beyond existing deadlines. That didn’t happen this time.

 ?? DARRYL DYCK / BLOOMBERG ?? Finance Minister Bill Morneau speaks at the G7 finance ministers and central bank governors meeting in Whistler on Thursday. Tariffs on steel and aluminum by the U.S. is now top of mind for participan­ts.
DARRYL DYCK / BLOOMBERG Finance Minister Bill Morneau speaks at the G7 finance ministers and central bank governors meeting in Whistler on Thursday. Tariffs on steel and aluminum by the U.S. is now top of mind for participan­ts.

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