Trump takes aim at Canada as European Union protests his tariffs

U.S. Commerce Secretary Wilbur Ross leaves his hotel in Beijing

U.S. President Donald Trump's tariffs are driving a wedge in the G7 - and laying the groundwork for a potential clash among its leaders next week in Quebec's Charlevoix region.

"It has been a tense and tough G7 - I would say it's been far more a G6 plus one than a G7", said Le Maire, who called the tariffs "unjustified".

The Trump administration announced Thursday that it would be implementing tariffs of steel and aluminum from Europe, Canada, and Mexico.

Analysts say China is unlikely to budge on those plans, which it sees as crucial for developing its huge economy. European Union officials are said to be resigned to accepting that some sort of tariffs are coming their way.

Former White House press secretary Anthony Scaramucci, also speaking to Radio 4, said with Mr Trump there was "always room for negotiation".

Reacting to the U.S. decision to activate tariffs on Canadian steel and aluminum, Ottawa said it would impose its own import levies on over $16 billion worth of USA products such as whiskey and orange juice. Highly restrictive on Trade! Officials noted this is the strongest trade action Canada has taken in the post-war era. Last year, Bay State businesses exported almost $3 billion in goods to Canada and another $2.5 billion to Mexico.

Later on Friday, Trump told reporters that he might prefer separate trade deals with Canada and Mexico instead of a revamped NAFTA.

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Trump's decision had already drawn furious responses from Canada's Trudeau, German Chancellor Angela Merkel and French President Emmanuel Macron. But he exempted Canada, Mexico and the European Union to buy time for negotiations - a reprieve that expired at midnight Thursday.

He added that it was too early to speculate on the likely impact on jobs, but said: "At worst, we could fall straight back into the crisis we suffered in 2015/16, which was the worst steel crisis in a generation".

Mexico complained that the tariffs will "distort global trade" and said it will penalize USA imports including pork, apples, grapes, cheeses and flat steel.

All three quickly responded with threats of tariffs on United States goods. "We are determined to protect the multilateral system", EU Trade Commissioner Cecilia Malmstrom said of the WTO challenge."We are expecting everybody to play by the rules".

Canadian Prime Minister Justin Trudeau said Thursday that he'd offered to go to Washington this week to complete the talks, thinking they were close to an agreement, but that Vice President Mike Pence called him and told him a meeting with the USA president would only happen if Trudeau agreed to put a five-year sunset clause into the deal. The US team also wants to secure greater intellectual property protections and an end to Chinese subsidies that have contributed to overproduction of steel and aluminum.

Trump's move makes good on his campaign vows to crack down on trading partners that he claims exploit poorly negotiated trade agreements to run up big trade surpluses with the United States.

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