The Daily Update - The G7 is dead, long live the G6+1 !

The G7 is no more… it's now the G6 + 1 as French Finance Minister Bruno Le Maire called it, warning ‘Unfortunately, we are being treated to a G6 + 1, with the United States squaring off against the rest and risking the economic destabilization of the planet’. Of those in the remaining G6, you can take your pick of who is the most outraged with the US Administration over trade tariffs and protectionism (indeed, not just the G6), asking Steven Mnuchin, US Treasury Secretary, to jointly convey their ‘unanimous concern and disappointment’ about the situation to his boss. Not that the White House seem particularly bothered. Larry Kudlow, the White House’s economic adviser came out all guns blazing on Fox News on Sunday announcing ‘Don't blame Trump’, adding ‘Blame China, blame Europe, blame Nafta, blame those who don't want reciprocal trading, tariff rates and protectionism’.

Both Canada and the EU have filed legal challenges to the US’s tariffs with the World Trade Organization (WTO). Cecilia Malmstrom, EU Trade Commissioner told reporters ‘If players in the world don't stick to the rule book, the system might collapse. That is why we are challenging the US at the WTO’. Justin Trudeau, the Canadian Prime Minister said he was ‘dumbfounded’ by the US insistence that national security was the basis for the tariffs, given that ‘Canadian and US troops had fought and died together in the mountains of Afghanistan and stood shoulder to shoulder’, adding ‘This is frankly insulting and unacceptable’. Again, a view that did not resonate with Kudlow, who thought he was ‘overreacting’, adding ‘As a fine friend and ally of the United States, nobody denies that. But the point is we have to protect ourselves’.

In China, the state run news agency Xinhua warned that ‘If the US rolls out trade measures including tariffs, all the agreements reached in the negotiations won't take effect’ which is a little at odds with the way Wilbur Ross, the US Commerce Secretary saw things after his meeting with  Chinese vice premier Liu He after talks. Ross saw the talks as ‘friendly and frank, and covered some useful topics about specific export items’. Maybe it was a language thing! As the Global Times editorial stated, ‘The US can't have its cake and eat it too’ and a decision needs to be made by the US, that it either ‘needs to choose between tariffs and exporting more to China’.

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