Trump says he wouldn't mind replacing NAFTA with 2 deals

THE CANADIAN PRESS  Jeff Mc Intosh                       Minister of Finance Bill Morneau speaks to the media in Calgary Alta

THE CANADIAN PRESS Jeff Mc Intosh Minister of Finance Bill Morneau speaks to the media in Calgary Alta

Prime Minister Justin Trudeau says he will work with Canadian steel and aluminium companies hit by punishing US tariffs to make sure jobs and workers north of the border are protected.

Finance leaders of the closest USA allies have vented their anger over the Trump administration's metal import tariffs but ended a three-day meeting in Canada with no solutions, setting the stage for a heated fight at a G7 summit next week in Quebec. Major trading partners rebuked Trump's multi-front trade offensive while their governments announced countermeasures and legal challenges. "They must open their markets and take down their trade barriers!" he wrote.

Trudeau was also asked about possible concessions the U.S.is seeking in the NAFTA talks.

The American move - which prompted retaliatory measures from Canada and others - threatens to drive a powerful wedge into the G7, and could fracture the long-standing multilateral relationship into something observers describe as a "G6 plus one", with the U.S.as the outlier.

As Trudeau prepares to welcome G7 leaders Friday in Charlevoix, Que., the lead Italian negotiator on climate change from last year's gathering says European leaders see the Trans Mountain decision as proof Europe is going to have to carry the ball on climate. Part of the 10 per cent levy at the wholesale level may eventually be passed on to Canadian consumers in the retail price, if the tariff war persists.

"Our absolute view is that this is absurd to think that Canada could in any way be a security risk to the United States", Canadian Finance Minister Bill Morneau told reporters at the conference.

Using US Census Bureau data on exports and the list of goods subject to the tariffs, Business Insider determined exactly which states will get hit hardest by the Canadian crackdown. The Bank of Canada will publish its latest financial system review Thursday, which is sure to be closely watched by economists after last week's mixed economic messages.

Trump campaigned on a pledge to rewrite trade agreements and crack down on China, Mexico and other countries. Trudeau cracked down on Chinese steel imports for Trump, and US data show that it has a trade surplus with Canada.

In response to the US move, Canada and the European Union have threatened to retaliate with tariffs of their own, prompting France's finance minister to say the "tense and tough" Whistler meetings were much more of a "G6 plus one" than a G7. "We will continue to defend supply management", she said, declining to elaborate.

Trump asserted that the U.S. had to be treated fairly on trade. Before the establishment of the federal income tax in 1913, tariffs were a big money raiser for the US government. Tariffs discourage imports by making them more expensive. Mexico, for example, has said it will penalize US imports including pork, apples, grapes and cheeses.

Earlier in the day, Trudeau's foreign minister, Chrystia Freeland, called the tariffs "the strongest trade action Canada has taken in the post-war era".

"Here, the European Union is claiming that the Americans have implemented trade restrictions - in this case, the steel and aluminum tariffs - that violate the rules of the worldwide system", Chad Bown, senior fellow at the Peterson Institute for global Economics told All Things Considered.

There could be opportunities for a bump in sales for Canadian substitutes for these US products, said Mike Von Massow, associate professor in the food, agricultural and resource economics department at the University of Guelph.

More broadly, economists say trade restrictions make the economy less efficient.

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