US President Donald Trump on Monday offered an olive branch to China after days of intense feuding over trade and opened the door to diplomacy on Iran, easing tension on the last day of a strained G7 summit. The leaders of the world’s major industrialised nations, meeting in the French coastal resort of Biarritz, look set to reach an agreement on how to help fight the Amazon forest fires and try to repair the devastation.
While they are not expected to leave with a more comprehensive set of agreements or even a joint communique, Trump and his Western allies appear to have agreed amicably to disagree on issues dividing them. These ranged from Washington’s escalating trade war with China, which many fear could tip the slowing world economy into recession; how to deal with the nuclear ambitions of both Iran and North Korea; and the question of whether Russian President Vladimir Putin should be readmitted to the group.
Trump, a turbulent presence at last year’s G7 gathering, insisted during the Biarritz meeting that he was getting along well with other leaders of a group that also comprises Britain, Canada, France, Germany, Italy and Japan.
The trade war between the US and China, escalated on Friday as both sides levelled more tariffs on each other’s exports, sending more shockwaves through financial markets.
Speaking on the sidelines of the G7 summit on Monday, Trump said he believed China wanted to make a trade deal after it contacted US trade officials overnight to say it wanted to return to the negotiating table. China’s lead negotiator in the US trade talks said earlier on Monday Beijing was willing to resolve its trade dispute with the US through “calm negotiations” and resolutely opposed the escalation of the conflict.
Trump hailed Chinese President Xi Jinping as a great leader and said the prospect of talks was a very positive development. Trump also backed away from confrontation over Iran on Monday, a day after French President Emmanuel Macron stunned other leaders by inviting Iran’s foreign minister to Biarritz for talks on the stand-off between Washington and Tehran.
Taking more heat out of the annual meeting, French and US negotiators meeting behind the scenes reached a compromise agreement on France’s digital tax, a levy that had prompted Trump to threaten a separate tax on French wine imports.
The row had threatened to open up a new front in the trade spat between Washington and the EU as economic relations between the two appeared to sour.
France’s 3 per cent levy applies to revenue from digital services earned by firms with more than 25 million euros in French revenue and ^750 million ($830 million) worldwide.
US officials complain it unfairly targets US companies like Facebook, Google and Amazon. They are currently able to book profits in low-tax countries such as Ireland and Luxembourg, no matter where the revenue originates. A source close to the negotiations said the deal envisaged that France would repay to companies the difference between a French tax and a planned mechanism being drawn up by the OECD. The G7 leaders were due to discuss climate change in one of their final sessions on Monday and were expected to consider a deal on technical and financial help for the Amazon.