The G7 summit is being held in Kananaskis, Alta., next week amid a burgeoning trade war sparked by U.S. President Donald Trump's tariffs.Adrian Wyld/The Canadian Press
The four European members of the G7 face a delicate summit in Kananaskis, Alta. They know that U.S. President Donald Trump is in attack-dog mode on tariffs, defence spending and other issues and that lashing out against him could backfire.
Ian Lesser, distinguished fellow of the German Marshall Fund of the United States and executive director of the public policy think tank’s Brussels office, believes the G7 will focus on Mr. Trump – but the goal will be to avoid antagonizing him.
“They aren’t looking for a fight with Trump,” he said. “Part of their victory would be just having him there and engaged without any overt conflict with him.”
The non-American members of the G7 – Canada, Japan, Italy, France, Germany and Britain – know from experience that Mr. Trump can be a force of disruption at the summits, as he was in 2017 in Taormina, Sicily. There, he berated the other six for skimpy defence spending, threatened to leave the Paris climate agreement (which he later did) and shunned the traditional closing news conference.
Ditto at the 2018 summit in La Malbaie, Que. Mr. Trump left it early after a spat about trade with then-Prime Minister Justin Trudeau. The U.S. did not appear in the final G7 communiqué.
The two-day summit in Kananaskis begins June 15, and the non-U.S. members no doubt have spent months plotting strategies. One option is to present a united front against Mr. Trump on tariffs, China, defence spending, support for Ukraine – Ukrainian President Volodymyr Zelensky is expected to attend – and other issues. Another option is to go soft on demands for fear of triggering Mr. Trump’s wrath, which could see him unleash another round of tariffs.
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Certainly, the six have plenty of reasons to be wary of Mr. Trump – and furious with him – for the turmoil he has inflicted on global trade. Since taking office in January, he has imposed double- and triple-digit tariffs on America’s trading partners, reversed or lowered them several times, then threatened to reimpose them, as he did in May with his vow to hit the EU with a 50-per-cent trade tax (now suspended until July 9). Today there is a baseline tariff of 10 per cent on most countries, though not Canada and Mexico, plus a 25-per-cent levy on autos. Early this month, Mr. Trump doubled the tariffs on steel and aluminum to 50 per cent, a level high enough to cripple Canadian exports of both products.
A Reuters analysis says the tariffs have cost the biggest companies in the U.S., Europe and Asia – among them Porsche, Apple and Sony – more than US$34-billion in lost sales and higher expenses. The analysis did not include the damage inflicted on the thousands of smaller companies that are not listed on the leading stock market indexes such as the S&P 500 or Europe’s Stoxx 600.
Since all the non-U.S. G7 members, plus the European Union itself (whose leaders will also be in Kananaskis), are in various stages of negotiating new trade deals with the White House, they will be wary of jeopardizing any progress they have made so far by angering Mr. Trump. For instance, if the EU fails to negotiate a trade deal by the July deadline, the threatened 50-per-cent levy may come into effect. If it does, the EU would almost certainly plunge into recession.
“Tariffs are the keystone of his approach to the world, and no international meeting is going to change this,” said trade lawyer Lawrence Herman of Toronto’s Herman & Associates. “Until the Trump ascendancy, G7 leaders tended to find consensus on major issues. It’s hard to see that happening in Kananaskis, especially given Trump’s unpredictability as well as the adversarial relationship between the U.S. and the Europeans and Canada.”
Since convincing Mr. Trump to back down on tariffs seems like a long shot, progress elsewhere may be pursued. Bulking up militaries will almost certainly be included. In principle, all the G7 countries agree that spending has to rise, especially among the EU countries, which face the prospect of the U.S. winding down its commitment to NATO, leaving Europe less able to confront a revanchist Russia.
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NATO’s current defence spending target for its 32 member states is 2 per cent of GDP. Mr. Trump wants to see it rise to 5 per cent. NATO, whose own summit will be held June 24-26 in the Dutch city of The Hague, is set to embrace that figure, though it could be fudged by allowing 3.5 per cent in hard military spending and the rest for infrastructure, cybersecurity and other outlays not directly related to weapons or military headcounts.
Defence spending in much of Western Europe, especially Germany, is surging. In March, the German parliament ripped up the government’s “debt brake,” which will allow Chancellor Friedrich Merz to spend essentially unlimited amounts to rebuild the country’s military and infrastructure.
Still, some countries will resist doubling their military budgets. They will have to consider their positions carefully ahead of the G7 and NATO summits, since Mr. Trump has been insistent since his first term as president that the U.S. will no longer support a NATO full of cheapskates. Italy will almost certainly argue that it already has one of the biggest militaries in Europe, including two aircraft carriers and an order for 115 Lockheed Martin F-35s, the most advanced fighter jets in the NATO arsenal, suggesting that its relatively small military budget in no way means it is an inefficient spender.
With agreements on tariffs and defence bound to be hard work at the G7, easier victories will likely be sought. Mr. Lesser said they might strive for a common front on the relationship with China in areas such as intellectual property, investment screening and disapproval of Beijing’s support for Moscow as the Russian invasion of Ukraine continues.
What is known is that Mr. Trump will be the wild card at the Canadian G7, as he was at previous G7s.
Editor’s note: A previous version of of this article incorrectly stated that the G7 summit in Kananaskis begins June 17. It begins June 15 and ends June 17.