Tariff dispute likely to cast a chill over G-7 summit

Mandel Ngan | AFP | Getty Images

President Donald Trump makes his way to board Marine One from the South Lawn of the White House on May 23, 2018 in Washington, DC.

There will likely be a chill in the air at Friday’s G-7 meeting in Quebec following President Donald Trump’s decision to press ahead with tariffs on steel and aluminum imports from the European Union, Mexico and Canada.

The two-day summit will see Trump meet with his counterparts from Canada, Japan, the U.K., France, Germany and Italy.

Given that last week the U.S. announced it would impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports from countries attending the G-7 summit, the meeting is unlikely to be pleasant.

One strategist, Craig Nicol at Deutsche Bank, said in a note Tuesday that “all eyes appear to be on this Friday and Saturday’s G-7 meeting in Quebec and whether or not it will be a united G-7 meeting or more a G-6+1.”

The countries affected by Trump’s tariffs have already responded. The EU said it would retaliate, having already indicated in March what goods, ranging from cranberries and orange juice to Bourbon and motorbikes, it could target. It said its tariffs could take effect on July 1.

Mexico announced Wednesday that it would impose a 20 percent tariff on U.S. pork imports. Canada, meanwhile, is looking to coordinate its response to the tariffs with the EU.

China, too, said last weekend that it wouldscrap any deals aimed at mitigating trade tensions if Trump’s threatened tariff hike on Chinese goods goes ahead.

Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron met Wednesday to discuss their next move and said in a statement Thursday that they both “support a strong, responsible, transparent multilateralism to face the global challenges.”