Trump, EU clash over trade at G7 opening

Biarritz: US President Donald Trump and EU leaders exchanged trade war threats on Saturday as they arrived in France for a G7 summit of wealthy democracies overshadowed by trans-Atlantic tensions before it had even begun.

“Trade wars will lead to recession, while trade deals will boost the economy,” EU Council President Donald Tusk said in Biarritz, the chic Atlantic resort chosen by French host President Emmanuel Macron to stage the annual meeting.

Trump flew into Biarritz on Air Force One hours after promising to impose punishing tariffs on French wine imports if Macron doesn’t withdraw a tax on US tech giants.

And Tusk vowed that the EU “will respond in kind.” “The last thing we need is a confrontation with our best ally, the United States,” he said. “This is not our initiative, this trade and tariff struggle, but we have to be ready and we are ready.”

It was a combative opening to the G7 summit, traditionally a forum for frank yet cordial discussions among leaders from the world’s leading economies – but much less so since Trump’s election.

European leaders are also using the summit to mount a tough push for action against fires in the Amazon rainforest, despite Brazilian right wing President Jair Bolsonaro’s angry response to what he sees as outside interference.

Echoing a warning from France, Tusk said Bolsonaro’s response to the fires and his downplaying of climate change threw into question a major EU-South America trade deal.

G7 leaders were greeted by a mass protest outside Biarritz, though 13,000 police have been deployed to keep them far from view.

Organisers said 15,000 people rallied around 30 kilometres (20 miles) south of the G7 gathering at the border town of Hendaye for a march over the Bidassoa River toward the Spanish town of Irun.

Red, white and green Basque flags waved above a crowd that included anti-capitalists, environmental activists as well as a few dozen of France’s “yellow vest” anti-government protesters, according to AFP journalists at the scene.

The G7 meeting will also be the full international debut of British Prime Minister Boris Johnson, who will meet Trump for the first time as leader. They are expected to discuss the UK’s impending exit from the European Union, which the US president has enthusiastically backed.

But though Johnson needs Trump’s support for a free-trade deal, he is at odds with him on a range of issues including the Iran nuclear crisis, climate change and global trade.

Trump is likely to find himself under pressure from the Europeans, particularly Macron, to ease off on his policy of “maximum pressure” on Iran over its nuclear programme.

Since pulling out of the landmark 2015 nuclear agreement limiting Tehran’s nuclear programme, Trump has slapped crippling sanctions on the Iranian economy. Macron wants him to put a “pause” on the policy, an aide said recently, which would enable talks to find a new diplomatic solution to the crisis.