Trump Appeasement Fails, So Trudeau Takes the Gloves Off

Canada's Justin Trudeau says NAFTA talks broke down after Pence made ultimatum

Canada's Justin Trudeau says NAFTA talks broke down after Pence made ultimatum

Gathering on the shores of the Saint Lawrence River, the leaders of the world's most industrialized economies will meet days after Trump leveled steep tariffs on steel and aluminum, threatened new barriers on imported cars and pulled the United States out of a nuclear accord with Iran that some of their governments helped negotiate.

Trudeau didn't specify what that might mean in the wake of USA measures aimed at Canada, Mexico and the European Union that slap import duties of 25 per cent on steel and 10 per cent on aluminum.

Finance leaders of the closest U.S. allies have vented their anger over the Trump administration's metal import tariffs but ended a three-day meeting in Canada with no solutions, setting the stage for a heated fight at a G7 summit next week in Quebec.

US President Donald Trump suggested Friday the United States might pursue separate free trade agreements with Canada and Mexico to replace the 24-year-old three-nation NAFTA pact.

Trump has also asked the U.S. Commerce Department to look into imposing tariffs on imported cars, trucks and auto parts, arguing that they somehow pose a threat to U.S. national security. "Do timber and lumber in USA?"

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"If the US rolls out trade measures including tariffs, all the agreements reached in the negotiations won't take effect", the state-run Xinhua News Agency reported Sunday, citing a statement from the Chinese negotiators who met with a USA delegation led by Commerce Secretary Wilbur Ross in Beijing over t the weekend.

The G7 leaders have also exchanged tough words over the issue, with Trudeau saying Sunday that calling Canada a national security threat to the United States is "quite frankly insulting".

While there may be Canadian-made alternatives, these tariffs will "inflict pain" on domestic firms as some inputs or unique products can not easily be switched or replaced, said Dan Kelly, the chief executive of the Canadian Federation of Independent Business.

The last example was Friday's Tweet about trade with Canada.

"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 USA decision to justify the tariffs on the basis of national security.

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Larry Kudlow, the US President's top economic adviser said that the new tariff decision taken by the US has nothing to do against the friendship and longstanding alliance that the country has with Canada. US President Donald Trump on Monday asserted an "absolute right" to pardon himself, once again lashing out at a probe into possible collusion with Russian election meddling and obstruction of justice.

"The Liberal government is the government that put supply management in place and it is the Liberal government that will protect supply management". Before the establishment of the federal income tax in 1913, tariffs were a big money raiser for the US government.

At the G7, Trump will defend his insistence on "fair and reciprocal trade", said a White House National Security Council official, speaking on condition of anonymity. The EU has stated that they are preparing similar tariff responses. Cecilia Malmstrom, the European Union trade minister, said the tariffs amounted to "pure protectionism" and are "further weakening the transatlantic relations".

Trudeau and the European Union condemned the steel and aluminum tariffs, and tempers will no doubt be high on June 8 when leaders hold a traditional discussion about trade.

Le Maire said it is up to the U.S.to take action to rebuild confidence among G7 members and to avoid any escalation during the leaders' summit next week. "Make no mistake - this is a full-on trade war", President Jerry Dias said.

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