Nations Head to G-7 Hoping to Reach Trade Deals With Trump

Hindustan Times

5 hours ago

Nations are eyeing the G-7 summit in Canada this week as an opportunity to strike trade deals with President Trump—or at least build momentum to keep talking and ease tensions over tariffs.
Japan, the European Union, Canada and Mexico all hope that face time with Trump will help them persuade the president to lower at least some of his most onerous tariffs in exchange for a range of concessions, such as higher military spending, action against China and cuts to tariffs and other trade barriers on U.S. companies. The hope from America's trading partners is that direct contact with the president can break through impasses.
'The G-7 is a rare opportunity for leaders to meet one-on-one or in small groups to discuss pressing economic and national security issues,' said Everett Eissenstat, former deputy director of the National Economic Council in Trump's first term.
'Given that President Trump is the ultimate decision maker when it comes to trade, it's no wonder that G-7 leaders hope to make progress in Kananaskis,' Eissenstat said, referring to the G-7 host city, about 53 miles west of Calgary, and 140 miles north of the U.S.-Canada border.
Trump's team pledged to complete dozens of deals by a July 9 deadline, but the administration has only struck a narrow pact with the United Kingdom and what amounts to a truce with China. Several sticking points remain with other trading partners, particularly Trump's tariffs on automobiles, steel and aluminum.
Steel coils in the yard of a steel mill in Hamilton, Canada.
Trump was noncommittal when asked about the potential for new deals Sunday, saying 'there could be' pacts announced at the G-7, before reiterating his threat to reapply tariffs if agreements can't be reached. 'But I think we'll have a few new trade deals, yeah,' Trump told reporters before departing for Canada.
Canadian Prime Minister Mark Carney is scheduled to hold a bilateral meeting with Trump on Monday morning. Canadian negotiators are pressing for lifting tariffs, given the country is the biggest supplier of foreign steel and aluminum to the U.S.
Canadian negotiators, led by Canada's minister for U.S.-Canada trade, Dominic LeBlanc, have regularly flown to Washington to meet with the U.S. team led by U.S. Commerce Secretary Howard Lutnick. Canadian officials say that discussions on an agreement have advanced to the point where Carney and Trump have talked directly about the outlines of an agreement.
'We're making progress, but we're not done,' Carney told the French-language Radio-Canada network.
A senior administration official said Trump's team feels less of an urgency to complete individual trade deals with Canada and Mexico given the nations are part of the U.S.- Mexico-Canada Agreement, which is set for a crucial review in 2026. The three nations came to the deal during Trump's first term.
Carney and Canadian officials are aiming to use the G-7 to jump-start talks over the expiring 2020 deal instead of waiting until closer to the deadline, according to a person familiar with the matter.
Officials said Canada has promised to boost its military spending by billions of dollars a year, much of which will go to U.S. defense contractors.
Mexico isn't a part of the G-7, but Carney invited Mexican President Claudia Sheinbaum to the summit, along with the non-G-7 leaders of India, Australia, South Africa, Brazil, South Korea and Ukraine.
Top Mexican trade officials have visited Washington several times in recent weeks to persuade Trump administration officials and U.S. steel-industry executives that tariffs aren't justified because Mexico is the only country with which the U.S. has a trade surplus on steel, aluminum and derivatives.
Since the U.S. already made an exemption on steel tariffs for the U.K., 'it's not that Mexico is asking to be the only one exempted, but rather that the same criteria be applied,' Mexican Economy Minister Marcelo Ebrard said.
The Trump administration and Mexico's government have discussed a possible deal that would reduce or eliminate a 50% tariff on Mexican steel and aluminum imports up to a certain volume, an agreement similar to the one reached between the top trading partners during Trump's first term, according to people familiar with the talks.
According to a Mexican official familiar with the talks, Mexico sees any final agreement as likely relying on Trump deciding to strengthen bilateral ties with the Sheinbaum administration.
Auto tariffs are a big sticking point with Japan. In its deal with the U.K., the Trump administration said it would lower tariffs on British automobiles to 10% for the first 100,000 vehicles shipped a year—about the volume of U.K. car exports to the U.S.
Talks between the U.S. and EU have progressed in recent weeks. But the two sides still remain far apart, people familiar with the talks say, as the U.S. looks for unilateral concessions from the bloc to lower some of the tariffs Trump has imposed or threatened.
The Japanese, who export over 10 times as many cars to the U.S. than the British, now view a similar quota scheme or other relaxation of auto tariffs as a necessity in any deal with the U.S. Agreeing to a deal that doesn't lower auto tariffs, they fear, could lead to domestic political upheavals and even threaten the minority government of Prime Minister Shigeru Ishiba, according to people familiar with the government's thinking.
One possibility is that the two sides could agree to an outline for a deal and then continue negotiations beyond the July 9 deadline, people familiar with the matter said. Treasury Secretary Scott Bessent said recently that the date could be rolled forward for trading partners if the U.S. deems they are negotiating in good faith.
Write to Gavin Bade at [e-mail], Brian Schwartz at [e-mail] and Vipal Monga at [e-mail]
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