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U.S. trade dispute with Canada a 'family quarrel,' official says

08 June 2018

As speculation started flying last month that a new North American Free Trade Agreement (NAFTA) was nearly across the finish line, the White House is now throwing a curve ball in the negotiations, deciding to move forward with tariffs on steel and aluminum imports from Canada and Mexico.

The U.S. floated the idea Tuesday of separate trade talks with Mexico and Canada rather than a new North American Free Trade Agreement (NAFTA) with the three countries as signatories.

Canada's Trudeau also slammed the tariffs after they were announced, calling them "totally unacceptable". "And they want to blame him for using tariffs".

One insider would only say there was nothing "tense" about the May 25 call.

Leaders are reportedly considering excluding the US from the traditional joint statement issued each year at the end of the G7 summit as a rebuke for Trump's punishing tariffs against the American allies. Brussels filed a complaint with the WTO and announced plans to impose additional duties on American-made products imported by the 28-member bloc. The complete list of proposed tariffs includes Iron and steel products, yogurt, coffee, whiskey and more.

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When Trudeau won power, the bedrock of his foreign policy was to return Canada to its traditional multilateral leanings _ support for institutions created after the Second World War such as the United Nations, NATO, the G7 and the global trading order.

"He is very seriously contemplating kind of a shift in the NAFTA negotiations", Larry Kudlow, director of Trump's National Economic Council, said Tuesday on the Fox News program "Fox and Friends". He prefers bilateral negotiations. Even if that impasse is overcome, the US also wants a sunset clause that would see the deal renegotiated every five years, something both Canada and Mexico have balked at because they believe it would create an uncertain investment climate. "He believes that bilaterals have always been better". He hates large treaties.

That describes President Trump's approach to extracting concessions on trade. There is no "deal" that is going to get rid of those tariffs.

Although he didn't provide specifics on a timeline, Kudlow said Trump "may be moving quickly toward these bilateral discussions, instead of as a whole".

Both men however voiced anger over Trump's imposition of steel and aluminum tariffs against close allies, supposedly on "national security" grounds.

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The relationship has reportedly frayed to the point where Trump was considering sending Vice President Mike Pence to the G7 summit in his place, according to a Washington Post report. "It will start to hurt American workers, the cost of raw materials will rise and industry will become less competitive". "Maybe, but nobody is forever", he told a news conference flanked by Canadian Prime Minister Justin Trudeau.

Trump's tariffs targeted G7 allies under a section of US trade law that justifies the action on the basis of national security - a characterization that Trudeau and others have vigorously rejected.

During the Burning of Washington, on August 24, 1814, first lady Dolley Madison famously rescued a portrait of George Washington before fleeing the White House. But the troops were British and if anything, the important part of the story is that it was retaliation for an American attack.

But Canada did not exist at the time - it was made up of British colonies.

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U.S. trade dispute with Canada a 'family quarrel,' official says