US isolated as G7 ministerial meeting closes

Talks coincided with the US introducing major tariffs on trade with the EU

U.S. Treasury Secretary Steven Mnuchin said the US was not abandoning its leadership in the global economy. 

The United States faced unified opposition from the finance leaders of its closest allies over the Trump administration’s metal import tariffs on Saturday.

The ministers ended their three-day meeting in Canada with a stern rebuke of Washington that sets up the likelihood of a heated debate at the Group of Seven summit in Quebec on June 8 and 9.

G7 ministers told US Treasury Secretary Steven Mnuchin, who was at the event in Whistler, British Columbia, to express their "unanimous concern and disappointments" to the White House over the new US tariffs, Canadian Finance Minister Bill Morneau said.

Mr Morneau, speaking at the end of the G7 meeting, said that the finance ministers and central bank governors were unanimously opposed to the harsh US steel and aluminium tariffs imposed by the Trump administration.

French Finance Minister Bruno Le Maire also expressed his anger.

"I want to make it clear that it is up to the US administration to make the right decisions to alleviate the situation and ease the difficulties," Mr Le Maire said,

He said that events next week "will depend on the decision the [US] administration is ready to take in the next few days and in the next few hours – I'm not talking about weeks ahead".

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Leaders from the world's major economies launched legal challenges on Friday after announcing countermeasures against harsh steel and aluminium tariffs that Mr Trump introduced.

No joint final statement emerged from the G7 meeting, a sign of the strong discord as the world's major economies verged on open trade conflict.

The European Union and Canada are the largest US exporters of steel and aluminium respectively.

Mr Trump's tariffs on America's largest foreign providers of the crucial metals upended the agenda for this normally convivial event for consensus building among countries that account for about half of global GDP.

Finance ministers at the snow-capped mountain resort instead spoke of exasperation and an abiding sense of betrayal by a long-time ally.

Chairing the meeting, Mr Morneau allowed participants to register grievances with Mr Mnuchin one at a time, according to a Canadian source.

Behind the closed doors Mr Mnuchin listened but spoke little, saying instead the discussion could continue at next week's G7 summit in Quebec, at which Mr Trump is expected to participate, according to sources briefed on the talks.

But the week's whirlwind global developments in trade suggested de-escalation is unlikely. In Washington on Friday, Mr Trump considered the possibility of scrapping the 24-year-old North American Free Trade Agreement in favour of seeking bilateral agreements with Canada and Mexico.

G7 governments were also digesting Mr Trump's threats to impose tariffs on hundreds of billions of dollars in US car imports on what the US president claimed was grounds of national security.

In China, US Commerce Secretary Wilbur Ross was due to conduct trade talks with Chinese officials even as Washington finalises planned sanctions on Beijing –including restrictions on Chinese investment in the US, new export controls and 25 per cent tariffs on about $50 billion in tech-sector goods.

The talks come despite Washington's apparent announcement last month of a truce with Beijing following negotiations in Washington last month.

China has threatened to hit back with tit-for-tat tariffs on tens of billions of dollars in US goods, as have Canadian, EU and Mexican authorities.

They have targeted goods manufactured in key US political districts that could weaken Mr Trump's hand after November's midterm elections.

The final list of Chinese imports affected by US tariffs will be announced on June 15 and imposed shortly thereafter, while the proposed investment restrictions and enhanced export controls will be announced by June 30, according to the White House.

"China's door for negotiation remains open," foreign ministry spokeswoman Hua Chunying said on Friday.