RPT-MNI INTERVIEW: No Trump Stimulus For G7: Ex-US Sherpa

By Evan Ryser

     WASHINGTON (MNI) - The White House is unlikely to bring any proposal for a

coordinated international economic stimulus plan to the G7 summit in Biarritz,

and will not be concerned by the potential lack of a communique, Clete Willems,

former U.S. sherpa and adviser to President Donald Trump, told MNI.

     "I think the administration would be very comfortable with no communique. I

know that that is the view of many of the folks involved with the process," said

Willems, Trump's former deputy assistant for international economics and deputy

director of the National Economic Council.

     "I think the President will again share lots of thoughts on what countries

could be doing to help with greater economic growth," he said in an interview.

     Host French President Emmanuel Macron "is trying to avoid having any sort

of blow up over the communique, like what happened in Canada last year, and part

of the rationale for not doing the communique may be to do that."

     Last year's G7 in Canada ended with Trump threatening trading partners,

leaving early, criticizing Canada, and withholding support for the communique

before eventually signing it. Trump's trade adviser Peter Navarro said Canada's

prime minister deserved a "special place in Hell."

     --BORIS JOHNSON

     Among issues on this weekend's agenda is Britain's impending exit from the

EU, set for Oct. 31.

     Willems noted that that President Trump will want to "show solidarity" with

new British Prime Minister Boris Johnson, who is probably seeking "leverage for

himself" so that "he gets a better deal or he has a hard Brexit where he can get

the U.S. to help with some of the economic pain that they're going to feel."

     Trump spoke by telephone with Johnson on Monday about trade, economic

issues and G7 plans, and on Tuesday the U.S. president called Johnson the "right

person in charge" in the UK.

     --AUTO TARIFFS

     On Wednesday, the U.S. and Japan have two-day ministerial level trade

discussions in Washington. The U.S. wants greater agriculture access while Japan

seeks a reprieve from potential auto tariffs.

     Trump is weighing whether to impose tariffs on auto imports from Japan and

the EU, and the White House had indicated a decision could come by mid-November

though it depends on progress in talks.

     Trump and Japanese Prime Minister Shinzo Abe are likely to "say something

to signal that talks are on the right track" this weekend, Willems said. An

announcement of a deal in principle in late November on the sidelines of the UN

General Assembly is "probably more realistic."

     "My impression is that things with Japan are on the right track and that

they will probably be able to come up with an alternative solution. I think that

for the trade agreement negotiations, they'll work something out. That does

leave the EU somewhat isolated. I have not yet seen the way forward for [the

EU]," Willems said.

     Speaking on the negotiations with the EU, Trump on Tuesday said, "all we

have to do is tax their cars and they would give us anything we wanted."

     --FRENCH DIGITAL SERVICES TAX

     Trump is also expected to register his concern with Macron and be "very

clear about his concerns" about France's new digital services tax, Willems said.

     The French Senate in July approved a 3% levy on revenue from digital

services companies such as Google, Apple, Amazon, and Facebook. On Monday in

Washington tech representatives testified to an interagency panel that the tax

could undermine any efforts towards a multilateral reform of the taxation of

technology companies and cost businesses hundreds of millions. The U.S. probe

could pave the way for American retaliatory import duties on French goods

including champagne, cognac, and French cheeses.

     "I'm not sure what France can offer at this point that will put that on a

better trajectory," Willems said. "I don't have high hopes that they're actually

going to suspend their tax which is unfortunate."

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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