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Trade wars lead to recession, harm world economy: G7 leaders

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Trade wars will lead to recession and harm the whole world, European Council President Donald Tusk and French President Emmanuel Macron warned Saturday prior to the Group of Seven (G7) summit.

Trade wars among G7 members will lead to eroding the already weakened trust among them, Tusk said at a press conference. He called for putting a stop to trade wars.

He also said trade deals and the reform of the World Trade Organization (WTO) are better than trade wars as trade wars will lead to recession, while trade deals will boost economy.

US President Donald Trump tweeted Friday that the United States will raise existing duties on 250 billion US dollars of Chinese products from 25 percent to 30 percent beginning on Oct. 1, and another 300 billion dollars worth of Chinese imports will see tariff rise from 10 percent to 15 percent on Sept. 1.

Besides China, the U.S. is currently at loggerheads with many countries, including G7 alliance from trade to security.

Threatening Germany with car tariffs, Trump vowed to tax French wines if Paris levies digital tax on big US technology companies; Casting Canada as a trade villain who “robs US blindly”, he also sniffed at the European integration by encouraging Brexit with a “great trade deal” with London; Withdrawal from the Paris climate accord and the Intermediate-Range Nuclear Forces Treaty one after another, he even showed his willingness to pull out some American forces in Germany unless Berlin increases defense spending to the 2-percent GDP threshold.

If Trump uses tariffs for political reasons, it would be risky to the whole world, including the European Union, Tusk told reporters.

Macron on Saturday also called for efforts to avoid trade friction, hoping leaders of other G7 nations to further realize that trade tensions will harm the world. He said they should avoid trade wars and reinvigorate global growth.

Leaders of Britain, Canada, France, Germany, Italy, Japan and the United States have arrived in the French coastal town of Biarritz for a three-day summit starting on Saturday with tough issues piled on the agenda: tightened trade tensions, trans-Atlantic relations at historical low, climate challenges with unprecedented fires in Amazon rainforest, Brexit with a highly probable scenario of no-deal and Iran nuclear deal at stake.

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