Trade spat heats up as Trump faces off against close allies

[WASHINGTON] President Donald Trump is headed for a showdown with America's allies at a Group of Seven summit this week, with the European Union and Canada threatening retaliatory measures unless he reverses course on new steel and aluminum levies.

Trump changes his mind often enough that US allies and rivals alike hope he'll do just that on the duties. An all-out trade war may become unavoidable if he doesn't.

"We still have a few days to avoid an escalation. We still have a few days to take the necessary steps to avoid a trade war between the EU and the US," French Finance Minister Bruno Le Maire said after a meeting of G-7 finance ministers and central bank governors in Whistler, British Columbia.

Meanwhile, the Trump administration is facing a warning from China that it'll end negotiations to resolve trade tensions if the US pursues planned tariffs on the Asian nation. Commerce Secretary Wilbur Ross discussed increasing China's purchases of US goods during a just-concluded visit to Beijing, the White House said on Monday, but its statement made no mention of shelving tariff plans.

The White House appeared unfazed by threats from allies. Top economic adviser Larry Kudlow said over the weekend the blame for any escalation lies with US trading partners. Mr Trump doubled down on that message Monday morning, taking aim at barriers against American agricultural exports.

"Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly," Mr Trump tweeted. "By the time I finish trade talks, that will change."

Investors appeared little rattled over the trade disputes. US and European stocks advanced on Monday, tracking peers in Asia.

Finance chiefs from the group of wealthy nations emerged from three days of talks on Saturday united in their condemnation of Mr Trump's decision to impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico, promising to press ahead with retaliatory measures unless Mr Trump steps back.

It was a rare rebuke of a member nation by the group that foreshadows high drama when Mr Trump meets leaders of the other six major industrialized nations Friday at a summit in the Quebec resort town of Charlevoix, near the border with Maine.

BLOOMBERG