June 10, 2018 / 6:37 PM / 5 months ago

U.S.-Canada dispute escalates after tense G7; Trump renews criticism of Trudeau

QUEBEC CITY, Quebec (Reuters) - The United States and Canada swung sharply on Sunday toward a diplomatic and trade crisis as top White House advisers lashed out at Canadian Prime Minister Justin Trudeau a day after U.S. President Trump called him “very dishonest and weak.”

Canada's Prime Minister Justin Trudeau (R) meets with U.S. President Donald Trump during the G7 Summit in the Charlevoix town of La Malbaie, Quebec, Canada, June 8, 2018. Photo taken June 8, 2018. REUTERS/Christinne Muschi

The spat drew in Germany and France, which sharply criticized Trump’s decision to abruptly withdraw his support for a Group of Seven communique hammered out at a Canadian summit on Saturday, accusing him of destroying trust and acting inconsistently.

“Canada does not conduct its diplomacy through ad hominem attacks ... and we refrain particularly from ad hominem attacks when it comes to a close ally,” Canadian Foreign Minister Chrystia Freeland told reporters on Sunday.

Freeland reiterated that Canada would retaliate to U.S. tariffs in a measured and reciprocal way, adding the country would always be willing to talk.

Trump in Singapore on Monday escalated his war of words with Canada and the European Union in a pair of tweets.

Trump said: “Fair Trade is now to be called Fool Trade if it is not Reciprocal” and suggested that Canada was profiting from U.S. trade, citing what he said was a Canadian press release. “Then Justin acts hurt when called out!”

He again suggested the United States was footing too much of the costs of NATO and “protecting many of these same countries that rip us off” on trade. The European Union, he added “should pay much more for Military!”

Trump had arrived in Singapore late on Sunday for the summit with North Korean leader King Jong Un that could lay the groundwork for ending a nuclear stand-off between the old foes.

White House economic adviser Larry Kudlow accused Trudeau of betraying Trump with “polarizing” statements on trade policy that risked making the U.S. leader look weak ahead of the historic summit with Kim.

“(Trudeau) really kind of stabbed us in the back,” Kudlow, the director of the National Economic Council who had accompanied Trump to Canada, said on CNN’s “State of the Union.”

Trade adviser Peter Navarro told “Fox News Sunday” that “there is a special place in hell for any leader that engages in bad faith diplomacy” with Trump.

Trudeau, in Quebec City for bilateral meetings with non-G7 leaders after the summit, did not comment as he arrived.

Trudeau got direct personal support from some European leaders.

British Prime Minister Theresa May “is fully supportive” of Trudeau and his leadership, a senior UK government source said, while European Council President Donald Tusk tweeted: “There is a special place in heaven for @JustinTrudeau.”

Freeland, asked about support from allies, said: “The position of our European allies, including Japan, is the same as ours. We coordinated very closely with the European Union, with Mexico, on our list of retaliatory measures and actions.”

Europe will implement counter-measures against U.S. tariffs on steel and aluminum just like Canada, German Chancellor Angela Merkel said, voicing regret about Trump’s decision to withdraw support for the communique.

Trudeau’s office said he had not said anything in his closing G7 news conference he had not said to Trump before.

The majority of Canadian exports go to the United States, making Canada uniquely vulnerable to a U.S. trade war.

Canadian officials, including Trudeau, have fanned out across the United States as part of a months-long charm offensive to appeal to pro-trade Republicans at every level. But even those vested in Canadian trade are not expected to come to Trudeau’s defense as long as the U.S. economy is roaring.

“I think the pushback by Congress is going to come up incredibly short,” Chris Barron, a pro-Trump Republican strategist, said of Republican efforts to rein in Trump.

‘GREAT CONCERN FOR G7’

Trump’s backing out of the joint communique torpedoed what appeared to be a fragile consensus on a trade dispute between Washington and its top allies.

“The G7 was a forum for friends – democracies with the same value system – to discuss issues of common interest. Now there is a question mark over that. But it did not start with this G7, but with the election of Donald Trump,” said a European official.

Trump also said he might double down on import tariffs by hitting the sensitive auto industry, throwing the G7’s efforts to show a united front into disarray.

“In a matter of seconds, you can destroy trust with 280 Twitter characters,” German Foreign Minister Heiko Maas said when asked about Trump’s U-turn.

France is also standing by the G7 communique, a French presidency official said.

Trump has infuriated the European Union, Canada and Mexico by imposing tariffs on steel and aluminum imports.

“The world as we know it, namely the U.S.-led rules-based multilateralism, is now in serious danger of unraveling, as illustrated at the G7 meeting,” said Erik Nielsen, chief economist at Unicredit Bank.

South African President Cyril Ramaphosa, who met with Trudeau on Sunday, said it was time for G20 nations to play a role and to “also bring about some good sense to all the key players.”

“Canada’s Freeland, who met with U.S. Trade Representative Robert Lighthizer on Friday, said she would speak to him later on Sunday, adding that she believed a deal to renew the North American Free Trade Agreement was still possible.

“We are convinced that a modernization is perfectly possible, we are convinced that common sense will triumph,” she said.

Reporting by Andrea Hopkins and David Ljunggren; Additional reporting by Jan Strupczewski and Roberta Rampton in Quebec City, Doina Chiacu and Sarah Lynch and David Shepardson in Washington, Michael Nienaber in Berlin, William James in London and Emmanuel Jarry and Dominique Vidalon in Paris; Writing by Amran Abocar; Editing by Meredith Mazzilli and Peter Cooney

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