Published: Thu, June 07, 2018
Finance | By Gustavo Carr

Trump asks if Canada burnt down White House in call with PM

Trump asks if Canada burnt down White House in call with PM

A French presidency official said that while G7 members would raise their unhappiness over the tariffs with Trump, they would not deliver an ultimatum that he drop them because the summit "isn't the place where you negotiate things like that".

President Trump and Vice President Pence attend the bill signing of the "Right to Try Act" in the Eisenhower Executive Office Building on the White House complex on May 30, 2018.

German Chancellor Angela Merkel previewed the dynamics on Wednesday, telling the German parliament that "it is apparent that we have a serious problem with multilateral agreements here, and so there will be contentious discussions".

The comment was generally seen as a joke, CNN wrote, but it did not seem to go over well with the Canadian leader. But the White House has signaled no change in plans.

"There may be disagreements", Kudlow added.

Mr Kudlow, though, on Wednesday shrugged off tensions with Canada as a "family quarrel".

The spat undermines the ability of the U.S.to rally support for its push to correct China's unfair trade practices, said Michael Smart, managing director of Rock Creek Global Advisors in Washington and a former worldwide trade director on the National Security Council.

According to the United States Trade Representative's office, the US had a $17.5 billion dollar goods deficit with Canada in 2017, but an overall surplus of $8.4 billion with Canada in 2017, with services, are included.

"I'm always the optimist, I believe it can be worked out", Kudlow said.

Although the European Union hasn't pulled the trigger on its own tariffs - yet - it recently opened a case at the World Trade Organization, arguing Trump's tariffs can't be justified on national security grounds and are no more than "pure protectionism".

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Trump was referring to the War of 1812, which was fought in part over the control of Canada.

In retaliation, all of them have either hit back with their own tariffs on USA goods or threatened to do so, as well as challenging the United States trade measure at the World Trade Organization. "So I don't think there's any issue there at all".

Trump has used the same language this year.

On the flip side, Americans purchase more from those countries than they sell, creating bilateral trade deficits that the president hates - even as most economists say they don't matter. The EU also attends.

The economy and trade will be the first topic discussed at the two day meeting, and could disrupt work on other key initiatives. He has mused about finding new ways to punish the northern neighbor in recent days, frustrated with the country's retaliatory trade moves.

Meanwhile, the European Commission last week unveiled a proposal to ban most single-use plastics and put the clean-up burden on manufacturers.

Despite the G7's efforts to coax the Trump administration away from a go-it-alone approach, some analysts now question whether Washington remains committed to basic policies that have upheld the post-World War Two global economic system.

The increasingly critical tone from allies is a shift after leaders spent the past year and a half seeking to woo and cajole the American president.

G7 summits usually end with the host nation issuing a final communique, but Canada may decide not to do so, preferring instead to release a statement by Trudeau summarizing the talks, said the sources. Mexico slapped a 20 percent tax on fresh US apples, and Democratic candidate Kim Schrier hammered her Republican opponent, saying the local economy will suffer.

"This is deeply offensive to Canadians", Alden said.

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