US President Donald Trump has managed to anger America’s northern neighbours and closest allies Canada, following a public spat with Canadian Prime Minister Justin Trudeau over a disagreement on trade policies. The G7, otherwise known as the ‘group of seven’, is a group consisting of Canada, the United Kingdom, USA, France, Germany Italy and Japan. These countries are the 7 most advanced economies in the world, and represent over 60% of the world’s net wealth. Trudeau hosted the annual G7 summit in Quebec, which took place in the midst of fears of a looming trade war between Canada and the United States.

Last week Donald Trump announced new tariffs (taxes applied to imports) on steel and aluminium, which has a direct effect on all the other G7 members, and the affected members planned their own retaliation to place extra tariffs on American goods from July onwards. President Trump has justified the measures in terms of national security, citing a need to reduce the dependence of the US military on imports of the metals. Prime Minister Trudeau has called this justification ‘totally unacceptable’, and pointed out that Canadian forces support the United States all around the globe, and was insulted at the motion of Canada posing a security threat to the United States. The truth is, Trump’s motivations for imposing tariffs are ideological.

Donald Trump’s policies on rade are a stark departure from previous White House thought; he views trade as a competitive arena, where the US has been losing to the likes of China for years because it is operating on a trade deficit (it imports more than it exports). His campaign promise that the country would ‘Win Win Win’ under his leadership has influenced his willingness to raise tariffs in order to secure concessions from trade partners.

The G7’s de facto stance on international trade is that trade liberalisation, (countries lowering their trade barriers) is beneficial, because it reduces the price consumers and businesses have to pay for imported goods. Prime Minister Trudeau has received support in Canada from across the country’s political spectrum, with the leader of the opposition Conservative Party Andrew Scheer expressing support for ‘the Prime Minister’s efforts to make the case for Free Trade’ and called the ‘personal attacks’ from Trump ‘divisive and unhelpful’. Canadian members of Parliament unanimously passed a motion in support of retaliatory measures against the US metals tariffs and to “reject disparaging and ad hominem statements by US officials which do a disservice to bilateral relations and work against efforts to resolve this trade dispute”.

It remains to be seen how far this trade war between the G7, in particular Canada, and the United States will escalate . Donald Trump is determined to reverse the trade deficit that the US currently operates on, which is very likely to come at the expense of decades of friendly relations with key allies. Ultimately, it is the consumers and businesses who will lose in such a conflict, as the price of goods will surely rocket until some concessions are made by either side.