RISING TRADE TENSIONS CAST SHADOW ON G7 MEET
Meeting in Canada is latest battleground for Europe and US as discord intensifies
AMID threats of imminent tariffs on metals and auto imports, escalating trade tensions between Europe and the United States are casting a shadow over a meeting of finance ministers from the world’s top economies.
Long a bastion of multilateralism, the Group of Seven (G7) ministerial in a Canadian mountain resort will serve as the latest battleground for the discord now at the heart of the global economy.
As the US engages in a multifront trade battle, with allies and adversaries alike, US Commerce Secretary Wilbur Ross on Wednesday rejected calls to extend exemptions on punishing import tariffs on steel and aluminium and warned that duties for massive US imports of motor vehicles were on the horizon.
This means the metals tariffs would take effect today, the second day of the G7 meeting as frustration mounts in Europe, the single-largest source of US steel imports.
The Wall Street Journal reported on Wednesday that Washington would allow the European Union exemption to expire, after weeks of talks failed to yield a compromise, such as a quota arrangement.
The harsh duties imposed in March to combat global overcapacity of the metals and boost domestic production, were only one part of a dizzying pace of developments, coinciding with a political crisis in Italy, which this week has roiled markets fearful for the future of the euro and bringing turmoil to the EU, the G7’s largest economic bloc.
US Treasury Secretary Steven Mnuchin was due to hold meetings with his European counterparts to discuss President Donald Trump’s confrontational trade agenda, said officials.
But Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, said that the agenda Canada, the current G7 chair, set for the meeting — which included uncontroversial themes such as inclusive development and innovation in finance — would be swept aside amid raw relations between America and its traditional allies.