May calls for Trump and EU to withdraw from brink of trade war

The G7 leaders, flanked by Donald Tusk and Jean-Claude Juncker. Credit: PA

Theresa May has urged Donald Trump and European counterparts to step back from the brink of a trade war at the G7 summit.

At a working session on economic growth, the Prime Minister warned that the US president’s tariffs on steel and aluminium imports would be met with retaliation from Europe unless a solution could be found quickly.

But the UK is also thought to have concerns about the European Commission’s proposed package of 2.8 billion euro (£2.46 billion) of tariffs on US goods targeting products including jeans, motorbikes and bourbon whiskey.

The Prime Minister was expected to use the session to suggest that rather than imposing tit-for-tat tariffs the G7 should be increasing pressure on China to reduce its excess steel capacity.

Mr Trump, who has engaged in a very public spat on Twitter over the tariffs, has been left isolated at the summit.

A senior UK official said Mrs May was using the G7 session to stress that – along with colleagues – she viewed the 25% tariff on steel imported to the US and 10% levy on aluminium as deeply regrettable.

Mr Trump’s justification that the levy imposed on imports was necessary due to national security implications makes it “harder to understand and explain” when it hit the “closest allies” of the US.

Mrs May was also expected to tell the meeting that “if we can’t find a way back from the current situation quickly, countermeasures from the EU will be unavoidable”.

The response from Brussels is expected to come into effect from July unless there is a breakthrough.

Mrs May was expected to warn there was no guarantee that domestic sources will replace the supply of products hit with tariffs.

The source said Mrs May would also make the point that “the West, led by the US devised the global rules-based system to enable our citizens to benefit from globalisation while providing reassurance that we would all play by a common set of rules”.

Speaking to reporters accompanying her at the G7 summit in Canada, Mrs May said the response from the EU must be proportionate.

The senior Government source said: “We are talking with the EU about exactly what the measures are going to look like”.

Another official said: “We need to work through the detail of the European Commission’s proposals.”