G7 summit kicks off in Canada amid trade disputes between US, allies

QUEBEC CITY - The Group of Seven (G7) summit, which kicked off here on Friday, is expected to be a tough meeting between the United States and its allies amid raising concerns over US tariffs on steel and aluminum imports.

The leaders of the G7, the world's most powerful industrialized countries including Canada, France, Germany, Italy, Britain, Japan and the United States, meet every year to discuss collaboration on issues like world economy, climate change, security and peace.

Upon his arrival in the Charlevoix city of La Malbaie, Quebec, US President Donald Trump had a brief discussion with French President Emmanuel Macron on issues concerning trade and the Democratic People's Republic of Korea (DPRK), according to media reports.

The official themes for this year's summit include increasing investments and creating jobs to boost growth and advancing gender equality.

However, the confrontation over Washington's unilateral decision to impose metal tariffs on imports from the European Union (EU) and Canada might dominate the summit.

Trump's rejection of the global climate accord and Iran nuclear deal have also divided the G7.

"It appears to be one against six since none of the other countries took aggressive action against the US and it is the US attacking its own allies," said Perrin Beatty, president and chief executive officer of the 200,000-member Canadian Chamber of Commerce, in an interview.

The head of Canada's largest business association is at a nearby media center looking for signs as to whether Canada, the United Kingdom, France, Germany, Italy and Japan -- and the European Union (EU) as a participant -- can convince the United States to rethink its anti-trade strategy.

"What we have is a president who has undermined the trust of the other six leaders around the table, and that will make it much more difficult to have a common front on other issues as well," said Beatty, a former senior Canadian cabinet minister.

In response to the US import tariffs on Canadian steel and aluminum, Canada followed the EU's lead and threatened to impose its own retaliatory tariffs on US goods.

Canada has announced import duties against US steel and aluminum as well as 71 categories of consumer and industrial goods that target the home states of prominent Republican members of Congress, such as fruit jams from Wisconsin -- the home state of House Speaker Paul Ryan -- and whiskies from Kentucky, -- the home state of Senate Majority Leader Mitch McConnell.

"We are hurt and we're insulted," said Canadian Foreign Affairs Minister Chrystia Freeland in a recent CNN interview on the US tariffs against Canada.

Beatty credited the Canadian government with crafting the tariffs -- which would come into effect on July 1 if the Trump administration didn't withdraw its import taxes -- to "maximize the impact within certain regions of the US while minimizing the impact on Canada, and trying to find, wherever possible, a Canadian or other supplier to provide the products."

However, he said Canada's business community has a "real concern" with how Trump is attacking what should be the goal of having "free and open" trade.

"We've seen a succession of measures taken by the president directed at close allies and friends of the US that are destructive, and that will inflict serious and direct damage on the US economy as well as its partners' economies," said Beatty. "Yet he seems oblivious to the consequences."

A tariff the US Commerce Department imposed earlier this year on Canadian newsprint has increased costs for newspaper publishers and now imperils the fate of local papers across the United States, Beatty said.

The Trump administration has also slapped tougher tariffs on Canada's softwood lumber industry, but that has resulted in driving up the cost of housing and furniture in the United States and making American furniture manufacturers less competitive, Beatty said.