The G7 is isolating its largest member ahead of this week’s leaders summit as new U.S. steel and aluminum tariffs triggered stern condemnation over the weekend from the six other nations in the alliance.
An advance meeting of G7 finance ministers and central bankers in Whistler, B.C., foreshadowed the major diplomatic challenges ahead as Canada hosts U.S. President Donald Trump and the rest of the G7 in Quebec’s Charlevoix region.
A final chair’s message from Finance Minister Bill Morneau said the ministers and central bankers asked U.S. Treasury Secretary Steven Mnuchin to “communicate their unanimous concern and disappointment” to Washington over its position that tariffs are justified for reasons of national security.
In an interview with The Globe and Mail, Mr. Morneau said he and others will be repeating the message this week that the new tariffs are destructive.
Mr. Morneau also provided some insight into the G7 finance ministers’ private talks in Whistler. He said there was broad agreement on most issues, such as co-operating on cybersecurity, but he and his counterparts had strong words for the U.S. when trade was addressed as the opening topic.
“It was a G7 meeting that demonstrates what the G7 can do. It got clearly more difficult around trade, and around trade, it wasn’t a G7. It was us saying that that action doesn’t work for us,” he said.
The final statement said the tariff discussion should continue at the leaders summit “where decisive action” is needed. The summit begins Friday.
“We have to be clear that the tariffs that the United States imposed on the other countries are not conducive to good relationships. We are not a security threat to the United States. Neither are our allies around the table. That’s got to be made absolutely clear,” said Mr. Morneau.
“We all said that because we’re such good friends, we need to communicate really clearly,” he said. “And so I led that effort. I said, first and foremost, let’s just explain why this doesn’t work for us. After we get through that, let’s make sure that we actually prove that we can get things done.”
Saturday’s concluding statement was a rare remarkable sign of public disagreement within the group of developed nations.
After the meetings, a smiling Mr. Mnuchin played down the tension within the room and the tone of the G7’s final message.
“I think there was clearly a consensus from the rest of them,” he told reporters. “I was not part of that statement, but there was a unanimous consensus that they do have that concern. I think the concern is not these tariffs, per se, but I think the concern is obviously many of them have put in or are threatening reciprocal tariffs and then perhaps what the U.S.’s reaction [will be.]”
Mr. Mnuchin noted that all seven nations were on the same page on most other issues on the agenda in Whistler.
“We believe in the G7 … and I’m sure the President looks forward to coming to Canada and meeting all the other leaders with many, many important issues going on throughout the world.”
As the finance ministers’ meeting was ending, Mr. Trump defended his trade policies.
“The United States must, at long last, be treated fairly on Trade,” he wrote on Twitter, stating that some countries impose tariffs on U.S. goods while the U.S. does not impose tariffs on the same country. “That is not Free or Fair Trade, it is Stupid Trade!”
The U.S. announced May 31 that Canada, Mexico and the European Union would no longer be exempt from import duties of 25 per cent on steel and 10 per cent on aluminum. Canada has announced retaliatory tariffs that will kick in July 1, while the EU is challenging the tariffs at the World Trade Organization and is contemplating a tariff response.
“It has been a tense and tough G7,” said French Finance Minister Bruno Le Maire Saturday. “The ball is now clearly in the camp of the United States.”
Mr. Le Maire said the EU and the G7 will be looking for clear signals of compromise from the U.S. over the coming days. If that doesn’t happen, he said the EU and the other G7 nations will respond.
“A trade war is not in the interest of the G7 countries, not in the interest of the United States of America and not in the interest of the EU countries,” he said, “but everything is ready.”