US action 'risks economic destabilization of the planet'

WHISTLER: The punishing US metal tariffs which took effect on Friday will reduce growth and kill jobs, posing a danger to the global economy, French Finance Minister Bruno Le Maire said.

Le Maire's remarks reflected the outrage among American trading partners who announced billions of dollars in retaliatory tariffs to stand up to Washington after it allowed harsh duties on steel and aluminum to take effect.

"Europeans will gain nothing through weakness. The American president will never respect Europeans' weakness," Le Maire told reporters.

Speaking on the sidelines of the gathering of finance officials from the Group of Seven top global economies, Le Maire warned about the potential impact of the worsening trade frictions.

"Unfortunately, we are being treated to a G6 + 1, with the United States squaring off against the rest and risking the economic destabilization of the planet."

US President Donald Trump's decision to press ahead with a multi-front trade assault this week has overshadowed the agenda for this week's G7 ministerial, normally a scene of compromise and trade promotion.

Trump originally imposed the steep metals tariffs in March, but had exempted key suppliers: the European Union, Canada and Mexico. Those exemptions were removed Friday.

- Short-sighted attack -

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"A trade war will ultimately penalize growth, and therefore employment, and therefore prosperity in the United States as in Europe. This really is short-sighted," Le Maire said.

"It is a spectacular decision which is causing a lot of noise for nothing because ultimately this will not re-balance US trade, it will weaken growth and kill jobs," he added.

He repeated France's defiance, saying the country "will not negotiate with a gun to our heads and I will say this again this morning to (US Treasury Secretary) Steven Mnuchin."

Mnuchin held bilateral meetings Thursday with his counterparts from Germany, Canada and Japan, and is due to meet with Le Maire on Friday on the sidelines of the gathering.

Le Maire also said Friday's upbeat US employment report, which showed continued robust job growth, proved there was no cause for attacking America's allies.

US unemployment fell to an 18-year low and employers added a net 223,000 new jobs, beating forecasts and delighting Trump, who has taken credit for the economy's performance.

"Given that the employment situation is so positive in the United States, what justifies taking aggressive measures against Mexico, Canada and the Europeans? How will this improve an economic situation that is already good?" he asked.

Canadian Finance Minister Bill Morneau told Mnuchin the US tariffs would harm both countries and should be rescinded, repeating declarations made in public, according to a person familiar with the meeting.