вЂ?Unanimous concernвЂ™: In Whistler, G7 finance chiefs unite to condemn TrumpвЂ™s tariffs
(Bloomberg) вЂ” Group of Seven finance chiefs issued a rare rebuke of a member nation, claiming U.S. trade actions could undermine global economic confidence and threaten the effectiveness of the Western alliance.
The statement singled out the Americans, the largest and most important member of the G7, saying вЂњdecisive actionвЂќ is needed at a leaders summit next week in Quebec. The ministers requested that Treasury Secretary Steven Mnuchin вЂњcommunicate their unanimous concern and disappointment.вЂќ
вЂњThe international community is faced with significant economic and security issues, which are best addressed through a united front from G7 countries,вЂќ Canadian Finance Minister Bill Morneau said in a вЂњchairвЂ™s summaryвЂќ of the meeting in Whistler, British Columbia. вЂњMembers continue to make progress on behalf of our citizens, but recognize that this collaboration and cooperation has been put at risk by trade actions against other members.вЂќ
MorneauвЂ™s comments came after an acrimonious three days of talks вЂ” with Mnuchin on the receiving end of much of the frustration вЂ” in which AmericaвЂ™s allies protested against President Donald TrumpвЂ™s decision to impose tariffs on steel and aluminum from the European Union, Canada and Mexico. With the trade dispute triggering one of the biggest crises in the G7 since the groupвЂ™s formation in the 1970s, frictions are poised to spill over into next weekвЂ™s meetings in Charlevoix, Quebec that Trump will attend. The group includes Canada, France, Italy, Germany, the U.K., Japan and the U.S.
вЂњIt has been a tense and tough G7. I would say it has been far more a G6 plus one than a G7,вЂќ said French Finance Minister Bruno Le Maire. The EU has threatened to retaliate with duties on everything from American motorcycles to bourbon.
Before these weekвЂ™s trade actions, the European Union and Canada had previously been granted temporary exemptions. Japan had already been subject to the tariffs, which the U.S. said were necessary to protect its national security.
At his closing press conference, Mnuchin said that heвЂ™s already conveyed the G7 message to Trump, who he said вЂњhas been very clear in wanting to address trade issues.вЂќ
вЂњOur objective is to make sure we have fair and balanced trade,вЂќ Mnuchin said in the Canadian ski resort town. вЂњI donвЂ™t think in any way the U.S. is abandoning its leadership in the global economy. Quite the contrary, weвЂ™ve had a massive effort in tax reform in the United States which has had an incredible impact on the U.S. economy.вЂќ
Le Maire opened the door to negotiations over the tariffs, but said the ball is in the U.S. court. вЂњWe still have a few days to avoid an escalation. We still have a few days to take the necessary steps to avoid a trade war between the EU and the U.S.,вЂќ Le Maire said, adding the EU doesnвЂ™t want a trade war.
Mnuchin reiterated that the U.S. will continue to have discussions around possible exemptions to the metal tariffs.
Shortly before the G7 meeting ended, Trump tweeted that вЂњthe United States must, at long last, be treated fairly on trade.вЂќ
вЂњIf we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!вЂќ the president said, without specifying what tariff rates he was referring to.
The trade disputes hijacked what was supposed to be a feel-good summit that global finance chiefs initially saw as an opportunity to tout the successes of the global economic upswing. The IMF projects the world economy will grow this year and next at its fastest pace since 2011 and MorneauвЂ™s statement did give a nod to the expansion.
Ministers вЂњagreed that the global economy has strengthened since they met last year in Bari and that the expansion is set to persist,вЂќ said Morneau, while cautioning the trade dispute is introducing unnecessary risks.
вЂњConcerns were expressed that the tariffs imposed by the United States on its friends and allies, on the grounds of national security, undermine open trade and confidence in the global economy,вЂќ it said.
Mnuchin faced so much criticism from his counterparts over the new trade levies that Japanese Finance Minister Taro Aso said he almost вЂњfelt sorryвЂќ for the U.S. finance chief.
вЂњHeвЂ™s not directly in charge of the metal tariffs, so in that sense it was very tough for him,вЂќ Aso told reporters. вЂњI felt sorry for him, but I guess itвЂ™s not the sort of issue I should sympathize with.вЂќ
Despite the divisions at the meeting, the U.S. remains a backer of the alliance of wealthy nations, Mnuchin said.
вЂњWe believe in the G7,вЂќ he said. вЂњThese are our most important allies. WeвЂ™ve had long-standing relationships will all these countries.вЂќ