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Why Trump's combative trade stance toward allies poses risks

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Insulting the host, alienating allies and threatening to suspend business with other countries: President Donald Trump was in full trade-warrior form for the weekend summit of the Group of Seven wealthy democracies in Canada.

The president's acrimony raised the risk of a trade war that could spook financial markets, inflate prices of goods hit by tariffs, slow commerce, disrupt corporations that rely on global supply chains and jeopardize the healthiest expansion the world economy has enjoyed in a decade.

Leaving the conclave in Quebec on Saturday, Trump threatened to "stop trading" with America's allies if they defied his demands to lower trade barriers. And he shrugged off the risk that his combative stance would ignite escalating tariffs and counter-tariffs between the United States and its friends — the European Union, Canada, Japan and Mexico.

"We win that war a thousand times out of a thousand," the president declared before jetting off to negotiate the denuclearization of the Korean peninsula.

Later, he picked a Twitter fight with the host of the G7 conclave. Calling Prime Minister Justin Trudeau of Canada "very dishonest and weak," Trump said the U.S. was withdrawing its endorsement of the G7's communique, in part over what he called Trudeau's "false statements" about U.S. tariffs at a news conference.

"I think the way this plays out is we end up with our trading partners responding in kind — a threat for a threat, a tariff for tariff," said Rod Hunter, a lawyer at Baker McKenzie and a former economic official on the National Security Council. "You end up with gradual escalation."

The summit at Quebec's Charlevoix resort failed to produce any truce in an intensifying trade conflict. Trump has imposed tariffs on steel and aluminum imported to the United States from the EU, Canada and Mexico. He has justified the tariffs by claiming that a reliance on foreign steel and aluminum threatens U.S. national security.

Outraged, the allies have responded by targeting American........

© Japan Today