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G7 allies prepare for clash over tariffs with Trump at leaders' summit

04 June 2018
G7 allies prepare for clash over tariffs with Trump at leaders' summit

Mr Morneau said Canada's government is not ready to discuss support or potential bailout packages for Canadian business sectors affected by the tariffs.

Countries around the world fought back on Friday against President Donald Trump's decision to slap tariffs on steel and aluminum imports, announcing retaliatory countermeasures and warning that the U.S. plan will hurt United States consumers. The official cautioned that the President could change his mind before an official announcement.

That announcement came about a month after the Canada Border Services Agency was granted extra powers to identify businesses that try to dodge import duties and ship cheap foreign steel and aluminum through the Canadian market. Canada is the biggest supplier of both metals to the United States, with the value of shipments close to $20-billion annually.

In the end, "this fight is not going to be resolved through diplomacy or at the G7 next week; it's going to be political developments in the United States", he added, noting that Canadian tariffs on USA consumer goods aimed to sway voters in key districts in the upcoming U.S. mid-term elections.

The 25% tariff on steel will impact half a billion dollars worth of trade between the United Kingdom and the USA, hitting steelworks such as Dalzell in Scotland.

The official said a range of issues remain to be resolved but the USA looks forward to continuing the negotiations with Canada.

The U.S. Beer Institute said Thursday its members, which include Denver and Montreal-based Molson Coors, are united against the tariffs on imported aluminum.

"This is (going to have) significant consequences", Qualtrough said on the sidelines of the trade show after a breakfast address in which she provided an update on several major military procurement projects. "We will respond. And we will respond appropriately".

"We will now trigger a dispute settlement case at the WTO since the USA measures on steel and aluminum clearly go against agreed global rules", she said.

The EU and China announced on Friday (1 June) that they would expand trade and investment cooperation amid the global trade dispute triggered by U.S. tariffs.

Canada and Mexico are also being hit by the Trump tariffs. NAFTA negotiations are deadlocked over tough protectionist demands from the United States.

The products would be hit if the WTO rules that the USA steel and aluminum tariffs are illegal.

Trump had originally imposed the tariffs in March, saying a reliance on imported metals threatened national security. She spoke with him again later by telephone, but left the US capital on Wednesday morning empty-handed.

On May 23rd, days before a scheduled meeting with the European Union and Japan on a joint trade strategy and in the middle of talks to revamp the North American Free-Trade Agreement (NAFTA), it began an investigation into whether auto imports are a threat to America's national security.

"Will the rest of Europe turn their attention to Germany and say look, Trump has a problem with you and we are suffering the consequences".

Flavio Volpe, president of the Automotive Parts Manufacturers' Association of Canada, echoed Ms. Freeland. The official said he believes there will not be a long-term impact on relations with affected countries and they "will get over this in due course".

A White House official, who spoke on condition of anonymity to describe the back and forth between both countries, said Trudeau spoke to Trump last Friday, and then Trudeau called Pence on Monday to follow up.