By Noemie Bisserbe and Rebecca Ballhaus
BIARRITZ, France -- World leaders converged on this French sea resort for what is expected to be a tense three-day summit amid heightened friction over the global trade system and fires burning in the Amazon rain forest.
The summit of the Group of Seven nations -- which includes the U.S., Japan, Germany, Italy, France and the U.K. -- is already shaping up as a tug of war between leaders trying to preserve decades of international cooperation and ones like President Trump, who is expected to use the forum to push his nationalist agenda.
Mr. Trump arrived in France Saturday afternoon after a turbulent week in Washington, where in a series of furious tweets on Friday he stiffened tariffs on Chinese imports after Beijing unveiled its own new levies on U.S. goods and directed U.S. companies doing business in China to explore relocating their options -- an order he lacks the authority to make. Tweeting from Air Force One on his way to France, Mr. Trump defended his directive, citing the Emergency Economic Powers Act of 1977, which allows the president to block individual companies' actions -- but only if he declares a national emergency with regards to China first.
Stocks and government bonds fell sharply in response to the back-and-forth between Washington and Beijing, sparking new concerns about global growth and the potential for a recession. The president this week has vigorously denied any economic slowdown, calling it "inappropriate" to use the word recession.
Also this week, Mr. Trump announced he was exploring new tax cuts to stimulate the economy, only to reverse himself a day later; canceled a scheduled trip to Denmark early next month because he said he disliked the tenor of the Danish prime minister's response to his interest in buying Greenland; sent a dozen tweets attacking the Federal Reserve and its chairman, whom he described as an "enemy"; and blamed Friday's stock market drop on the departure of a three-term Democratic congressman from the 2020 race.
As he left Washington on Friday, he took a shot at French President Emmanuel Macron, who is hosting this year's summit. Criticizing Mr. Macron's decision to tax U.S. tech companies, Mr. Trump threatened: "If they do that, we'll be taxing their wine, or doing something else."
Mr. Macron said on Saturday: "We need to succeed in having a de-escalation and avoid this commercial war that is spreading everywhere."
That backdrop is expected to make a Sunday morning G-7 session on the economy, added at the last minute at the U.S.'s request, even more contentious. There, Mr. Trump is expected to tout his economic policies to a group of leaders that have largely rebuked his approach, while criticizing fellow G-7 members' handling of their own economies. The president will also hold bilateral meetings over the course of the summit with several leaders he has tangled with in the past, including German Chancellor Angela Merkel and Canadian Prime Minister Justin Trudeau.
British Prime Minister Boris Johnson, who is making his G-7 debut, Saturday warned that rising trade barriers risk hampering global growth. He also sought to play down fears that Britain's departure from the European Union would lessen the U.K.'s clout on the global stage. Mr. Johnson is expected to use the G-7 as a platform to burnish Britain's close relationship with the U.S., as his administration hopes to sign a trade deal soon after Brexit. "Some think Britain's best days are behind us," said Mr. Johnson. "To those people I say: You are gravely mistaken."
On Friday, France threatened Brazil with pulling out of the trade deal between the European Union and the Mercosur group of South American nations, accusing Brazilian President Jair Bolsonaro of lying about his country's efforts to protect the environment.
The trade deal between the EU and Mercosur would create a bloc of 780 million people representing a quarter of the world's economy. The accord still requires the approval of member states and the EU's legislature, a difficult undertaking if powerful EU countries such as France are opposed.
Mr. Trump on Friday injected himself into that fight, too, tweeting that he had just spoken with Mr. Bolsonaro and that "our future Trade prospects are very exciting and our relationship is strong, perhaps stronger than ever before." Mr. Trump added that the U.S. was ready to assist with the fires in the Amazon rain forest if needed.
About 370 square miles of Amazonian forest, equivalent to the size of Indianapolis, were lost in June, an 88% increase from the same month a year earlier, according to preliminary data from Brazil's Space Agency, Inpe, which is in charge of monitoring deforestation.
Forest fires, most set intentionally to clear land, have also ravaged the Amazon over recent weeks, blanketing Brazilian cities in thick smog. While forest fires are common in Brazil during the drier months in the middle of the year, environmentalists say Mr. Bolsonaro's efforts to reduce enforcement action against deforestation have encouraged land grabbers to slash and burn the forest.
European Council President Donald Tusk said that "there's still no certainty whether the group will find common solutions, and the global challenges are today really serious, or whether it will focus on senseless disputes among each other."
Mr. Tusk said the EU is still standing by the Mercosur free trade deal, "but it is hard to imagine a harmonious process of ratification by the European countries, as long as the Brazilian government allows for the destruction of the green lungs of planet Earth. This is about our to be or not to be."
Ms. Merkel before traveling to Biarritz stressed the importance of the G-7, especially in times when many problems need solving.
"Talking with each other is certainly better than talking about each other, and the G-7 is an excellent opportunity for that," Ms. Merkel said in a video message published on Saturday.
Ms. Merkel said one of the goals of the meeting is to make sure everything is done to stop the rain forest from burning. "Emmanuel Macron is right: Our house is burning and we mustn't remain silent about it," she said.
She also said she wanted to deepen cooperation with Africa and how to reduce the vast development gaps that still exist between the G-7 and African countries.
Mr. Trump, as he left Washington late Friday, didn't mince words about his relationships with G-7 leaders. "I think it will be very productive, seeing a lot of leaders who are friends of mine -- for the most part," he said. "Wouldn't say in 100% of the cases, but for the most part."
--Max Colchester in Biarritz, Ruth Bender in Berlin and Valentina Pop in Brussels contributed to this article
Write to Noemie Bisserbe at email@example.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com
(END) Dow Jones Newswires
August 24, 2019 08:35 ET (12:35 GMT)
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