Politics

Trump is meeting with world leaders at G7 as he escalates US-China trade war

Key Points
  • The summit in France comes amid fears over a global economic slowdown, and U.S. tensions with allies over trade, Iran and Russia.
  • The president has maintained tough rhetoric against the European Union. The White House is set to decide in November whether they will impose duties on the auto industry in Europe.
  • Donald Tusk, president of the European Council, said on Saturday that the EU would "respond in kind" if the U.S. imposes tariffs on France over its digital tax plan.
  • British Prime Minister Boris Johnson told reporters upon his arrival in France that he plans to tell Trump at the summit to pull back from the trade war with China.
U.S. President Donald Trump and First Lady Melania arrive in Biarritz for the G7 summit, France August 24, 2019. REUTERS/Regis Duvignau
Regis Duvignau | Reuters

President Donald Trump arrived in France on Saturday for the annual meeting of the Group of 7 powers, one day after he called his Federal Reserve chief an enemy of the United States and urged American companies to end business with China in the midst of an escalating trade war.

The summit comes amid fears over a global economic slowdown, and U.S. tensions with allies over trade, Iran and Russia.

Trump said Friday he will raise existing duties on $250 billion in Chinese products to 30% from 25% on Oct. 1. Additionally, tariffs on another $300 billion in Chinese goods, which start to take effect on Sept. 1, will now be 15% instead of 10%.

In addition to the China trade war tensions, the president has maintained tough rhetoric against the European Union. The White House is set to decide in November whether they will impose duties on the auto industry in Europe.

Earlier this year, Trump vowed to set tariffs on imported vehicles and parts from the EU and Japan, but delayed that duty for 180 days in May. The president signed a deal with the EU earlier this month to boost U.S. beef exports.

Trump again threatened to tax European cars Tuesday.

"Dealing with the European Union is very difficult; they drive a high bargain," Trump said. "We have all the cards in this country because all we have to do is tax their cars and they'd give us anything we wanted because they send millions of Mercedes over. They send millions of BMWs over."

Experts say that trade conflict with Europe could be much more damaging than the current tit-for-tat conflict with China.

British Prime Minister Boris Johnson told reporters upon his arrival in France that he plans to tell Trump at the summit to pull back from the trade war with China. Johnson said his priorities for the summit "are clearly the state of global trade."

"I am very worried about the way it's going, the growth of protectionism, of tariffs that we're seeing," Johnson told reporters on the tarmac.

Trump's first meeting on Saturday was a private lunch with French President Emmanuel Macron.

Macron, who will host the summit, said they were discussing world crises, including Libya, Iran and Russia, as well as trade policy and climate change.

Trump said he anticipated the lunch with Macron would go well.

"We actually have a lot in common, Emmanuel and I. We've been friends for a long time. And every once in a while, we go at it just a little bit — not very much. But we get along very well," he said.

When asked if he would place tariffs on French wines in retaliation for France's digital services tax, which he previously threatened to do, Trump was noncommittal, but responded that he loves French wine.

Donald Tusk, president of the European Council, said on Saturday that the EU would "respond in kind" if the U.S. imposes tariffs on France over the digital tax plan.

The G-7, which represents the world's major industrial economies, includes the U.S., Germany, France, Japan, Canada, Italy, and the U.K.

At the summit, world leaders are expected to discuss several foreign policy matters, including Iran and tensions between India and Pakistan, as well as record wildfires in the Amazon rainforest that have spurred global outrage.

Formal talks begin Sunday morning. Many experts expect the summit to end without a joint communique because of clashes on trade.