Trade fears brew ahead of Canadian gathering in Alabama

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White House economic advisor Larry Kudlow stated on the weekend that Canadian Prime Minister Justin Trudeau is "overreacting" to the ongoing NAFTA dispute that saw the U.S. impose hefty steel and aluminum tariffs on Canada and Mexico, as well as the European Union, late last week.

"What you are saying to us and all of your North Atlantic Treaty Organisation allies is that we somehow represent a national security threat to the United States", Freeland said Sunday.

In the interview published this Sunday, Trudeau confirmed his nation will establish reciprocal direct tariffs in retaliation.

U.S. President Donald Trump says he'd prefer to see separate bilateral trade deals with Canada and Mexico instead of the current North American Free Trade Agreement.

In the run-up to next week's G7 summit, finance ministers and central bank governors from six of the G7 countries have slammed the U.S. decision to impose tariffs on steel and aluminum imports, Deutsche Welle reported.

The memo, citing outside studies, adds the possible job losses from tariffs both threatened and enacted by the administration, plus a possible U.S. withdrawal from NAFTA, the trade agreement with Canada and Mexico.

"One of things I have to admit I'm having a lot trouble getting around is that this whole thing has come about because the president and the administration has decided that Canada - Canadian steel and aluminum - is a national security threat to the United States", Trudeau told NBC's Chuck Todd. Oil and gas pipelines use a special type of steel, much of which is not made in the United States.

While there may be Canadian-made alternatives, these tariffs will "inflict pain" on domestic firms as some inputs or unique products can not easily be switched or replaced, said Dan Kelly, the chief executive of the Canadian Federation of Independent Business.

Meeting with Kim to Take Place as Planned
After Trump received the letter , he announced that the June 12 summit with North Korea was on again in Singapore. Until Kim agrees to denuclearization, Trump added, the US sanctions on North Korea will remain as they are now.

It's extremely hard to imagine the US being able to force such a long list of countries into giving in, especially since Trump is fighting a trade war on so many fronts at once.

President Donald Trump's chief economic adviser is brushing off concerns over escalating trade disputes with a host of USA allies as nothing but a "family quarrel".

Describing the North America Free Trade Agreement (NAFTA) as a bad deal for the United States, Trump said people were starting to see it.

"The national security issue is a flood of imports from 20 countries that are putting our aluminum and steel industries out of business--the national security us defending ourselves against that flood of imports, so those industries can survive", Navarro said.

The G7 ministers urged US Treasury secretary Steven Mnuchin to deliver their message before leaders of the group's member countries meet next week in Quebec.

German Finance Minister Olaf Scholz said G7 countries also told Mnuchin about their opposition to new US sanctions on Iran, which will affect European companies. "We still have a few days to take the necessary steps to avoid a trade war between the EU and the US", Le Maire said, adding the European Union doesn't want a trade war. The official said a range of issues remain to be resolved but the US looks forward to continuing the negotiations with Canada.

"French Finance Minister Bruno Le Maire also said Mnuchin was clearly isolated at on the tariff issue, with the group devolved to a "G6 plus one" with the six expressing "total incomprehension" over the destabilizing U.S. move". The Trump administration is offering a process in which individual companies can apply for exemptions, and Zive says that the new tariffs will lead to thousands of such requests. "They report a really high surplus on trade with us", he wrote. "This doesn't happen that often at G7 meetings, but it was US against everyone else", Aso said.

And in a testament to how ill-conceived the US strategy is, even the United Steelworkers union opposes the move. Mexico, the US President said, had taken US vehicle companies, a big percentage of them.