Tit-for-tariff Trump ready for trade fight at G7

A defiant Donald Trump will confront angry world leaders at a fiery G7 summit tomorrow.

Justin Trudeau, left, greets Emmanuel Macron in Ottawa, Canada. Picture: AFP

A defiant Donald Trump will confront angry world leaders at a fiery G7 summit tomorrow as he threatens to levy more trade penalties on Canada and defend his “America first” protectionist ­polices.

The meeting in Quebec comes amid growing anger from US allies about the US President’s decision to slap steel and aluminium tariffs on key allies Canada, Mexico and the EU.

The EU yesterday hit back with $US3.4 billion ($4.4bn) in tariffs on US imports of boats, peanut butter and Harley Davidson motorbikes.

But Mr Trump’s economic adviser, Larry Kudlow, said ­yesterday the President was unrepent­ant and would point out to leaders of the Group of Seven powers the unfairness of a global trading system that was tilted against the US.

“There are disagreements. He’s sticking to his guns, and he’s going to talk, talk to them. Talk is the best remedy here,” he said.

Mr Trump is reportedly considering not signing the traditional G7 communique after the meeting to show that the US believes global trade rules need to be shaken up.

It was revealed yesterday that White House officials were considering extra economic penalties against Canada for threatening to impose retaliatory tariffs in response to Mr Trump’s refusal to exempt Canada from steel and aluminium tariffs.

US-Canada relations have been rocked by the Trump tariffs, which Canadian Prime Minister Justin Trudeau has labelled “insulting and unacceptable”.

It was also revealed yesterday that during a tense phone call between the two leaders late last month Mr Trump quipped to Mr Trudeau: “Didn’t you guys burn down the house?”

The President was referring to the War of 1812 in which the ­British burned down the White House.

Mr Trudeau said yesterday there would be “some very direct conversations” on tariffs at the G7 summit.

British Prime Minister Theresa May told Mr Trump this week that the US tariffs on European steel were “unjustified and deeply disappointing”, while French President Emmanuel Macron has described them as “illegal” and “a mistake”.

Mr Trump will meet with Mr Trudeau and Mr Macron on the sidelines of the summit.

America’s allies have been seeking to co-ordinate their response to Mr Trump’s protectionist policies, warning they threaten the decades-long trend towards freer and fairer global trade.

“Japan and the EU will team up on this issue and call on co-­operation from other countries,” Japanese Trade Minister Hiroshige Seko has said.

Canada is planning to levy $US12.8bn in tariffs on US imports while Mexico this week imposed $US3bn in tariffs on US pork, cheese and steel.

But Mr Kudlow, said yesterday the disagreements amounted to a “family squabble”.

He said Mr Trump was trying to fix the world’s “broken” trading system.

“It was a good system and it lasted for a bunch of decades but that system has been broken in the last 20 years plus,” he said.

“The World Trade Organisation, for example, has become completely ineffectual … Trump is trying to fix this broken system.”

Mr Kudlow said that despite the tariffs decisions, Mr Trump saw himself as a free-trader.

“But until we can deal with these unfair practices and so forth, we will not have fair trade. So I think his cause is just and I think the rest of the world agrees with him.”

Republicans who support free-trade have criticised the President over his tariff decision,

Republican senator Bob ­Corker said Mr Trump had lobbied him to drop a proposed bill to limit a president’s power to impose tariffs.

House speaker Paul Ryan as well as Republican senators Ben Sasse and Orrin Hatch are among those who have opposed Mr Trump’s decision to levy tariffs on US allies.

Mr Ryan said the move “targets America’s allies when we should be working with them to address the unfair trading prac­tices of China”.

Cameron Stewart is also US contributor for Sky News Australia.