QUEBEC CITY—U.S. President Donald Trump greeted Prime Minister Justin Trudeau warmly Friday morning as he arrived at the G7.

Although he’d tweeted grumpily the night before that Trudeau was “so indignant” about American tariffs, Trump looked happy to see the prime minister. They shook hands and smiled for the cameras, as all eyes were on them.

Hours later, they sat down together behind closed doors. According to a source with knowledge of their discussions, Trump said: “People forget how close we are Justin, and I notice that they took a picture of us smiling and talking and the market went up 200 points.”

Trump would raise that anecdote a couple more times over the course of what was a pivotal meeting, according to an official. Asked what to make of that, the source said perhaps the American president liked to reflect on his power.

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Whether markets moved or not, Trump and Trudeau’s sit-down exchange came after a long afternoon of contentious talks on the economy and trade among G7 leaders.

In the end they appeared to reach a fragile G7 consensus and U.S. agreement on a joint communiqué only to see that fall apart with Trump’s two-tweet blast at Trudeau Saturday night.

Here’s a look at what unfolded over the G7 summit that formed a backdrop to that eruption, one that undermined unity of the Western alliance. Closer to home, there appears little prospect of quick recovery of the supposed goodwill between Trump and Trudeau that is so crucial to resolving the tariff dispute and the stalled negotiations over NAFTA, the North American free trade pact.

Based on conversations on background and on-the-record talks with Canadian and other G7 delegation officials over the past three days, the behind-the-scenes dynamic was a tense one.

Coming into the summit, Trump had already angered allies with his decision to slap tariffs on steel and aluminum imports from some of America’s key allies, including Canada.

At talks on the economy Friday afternoon, one official from a European G7 delegation said Trump aired a string of “grievances” about trade. The others responded in kind, the official said.

All leaders in their final news conferences referenced that afternoon’s trade talk as “frank” and direct.

U.K. Prime Minister Theresa May told reporters that the other six leaders had expressed their opposition to Trump’s steel and aluminum tariffs. “We had some difficult conversations and some strong debate.”

German Chancellor Angela Merkel told Trump it was unacceptable that after two generations of alliance where they had worked to integrate their economies, Trump would sandbag his G7 allies with steel and aluminum tariffs “without talking to anybody,” said one official.

Japanese Prime Minister Shinzo Abe tackled Trump’s threatened tariffs against the auto industry, arguing Japanese cars are not a national security threat to the U.S.

Those frictions on trade continued into the Friday evening bilateral meeting between Trump and Trudeau, one that started off cordially.

Trudeau offered the U.S. president a small token of friendship, a framed photo of Trump’s grandfather’s hotel in Bennett, B.C., which Trump’s press secretary tweeted as a “great moment” between the two.

As Canadian officials tell it, Trudeau went over all of Canada’s arguments in opposition to Trump’s steel and aluminum tariffs, even though the Canadians had the feeling the American team had already “done some homework about how the Canadian public had reacted” to tariffs, and were surprised by the backlash.

Trudeau told Trump directly what he said in American television interviews the week before: that Canadians felt Trump’s declaration that Canadian steel and aluminum is a national security threat was “kind of insulting” — as Trudeau described it in his news conference Sunday.

An official said Trudeau used the example of the Canadian airbase where Trump’s Air Force One had touched down for the summit about an hour north.

“Why is Bagotville there? Bagotville is there to protect aluminum smelters that were building American warplanes in the Second World War,” Trudeau told Trump.

U.S. President Donald Trump delivered a stern warning on trade to foreign countries at the Group of Seven summit on Saturday, urging trading partners not to retaliate against U.S. tariffs on the imports of steel and aluminum. (The Associated Press)

Trump’s trade representative, Robert Lighthizer, protested about Canada’s tariff markups on foreign dairy imports.

“The Prime Minister said, ‘Look, here’s the essence of our trading relationship. We sell you a lot of oil and energy and you sell us a lot of food and manufactured goods. It is a trillion dollar relationship. We could pick any one of those things and argue over the numbers. But shouldn’t we be talking about the relationship as a whole, which is an unmitigated positive for both of us?”

Canadian officials believed at the time Trump “got that.” They agreed to accelerate NAFTA talks, but there was no clear path as to the next steps with the tariffs in place.

After their meeting, Trump and Trudeau attended the G7 leaders working dinner on peace and security in the world, a topic where all leaders could find some common ground.

Abe’s spokesperson, Noria Maruyama, said half the discussion around the table was about North Korea, with Trump having the unanimous support of his allies. The rest of the talk centred on Russia, which he said prompted a lot of “vivid” and “frank” discussion.

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En route to the summit, Trump had shocked everyone in calling for Russia to be readmitted to the G7. The others said no. Rookie Italian Prime Minister Giuseppe Conte had first supported Trump, but later dialled back his enthusiasm.

After dinner Friday night, the leaders moved outdoors to watch a cultural entertainment show, complete with a bonfire and Cirque de Soleil performers.

Maruyama said the show put everyone in a “friendly” mood and, when it was all over, the leaders continued to talk.

Trudeau and Trump had been talking separately, then urged everyone to come into a leader’s lounge off their meeting room in the sprawling Manoir Richelieu so the leaders could try to reach agreement on a final statement.

The Americans, led by Trump economic adviser Larry Kudlow, said they couldn’t agree to language that supported the global rules-based trading system because they were trying to reform the system, said a source, but agreed to a nod to the World Trade Organization. Trudeau argued that the two were linked.

The leaders went back and forth for up to an hour. The Americans could agree to language on the WTO, and “a rules-based global system” not “the rules-based global system,” said the source. All agreed to “commit to modernize the WTO to make it more fair as soon as possible.”

After that, the task of fine-tuning the statement was handed off to their “sherpas” or summit aides, and senior officials, who met until 2:30 in the morning.

But by the next morning, before the G7 leaders were to meet with a gender advisory council for breakfast, it appeared the consensus had unravelled.

And other sticking points remained, said the official. The Americans didn’t want to agree to a declaration on climate change that referenced the Paris Accord, nor did they want to sign on an oceans charter, which contained targets on plastics, with similar language.

Word came Trump was unexpectedly going to hold his own closing press conference before leaving. So there was a scramble to get the leaders together again to haggle over those issues.

It was the last chance to forge compromises.

Photos of the group of G7 leaders and their top officials, including one posted by Merkel’s office that went viral, show an intense debate that was going on over the final communiqué’s language on trade and oceans, with Trump seated in the middle.

No one expected Trump would sign on the climate change piece, but they’d hoped the U.S. would agree to take joint action to tackle plastic pollution in the world’s oceans.

In the end, it didn’t.

Trump held a news conference in which he promptly appeared to reject even the ideas on trade embodied in the communiqué he had agreed to, threatening to cut trade ties with any country who didn’t agree to a “zero tariffs” approach, telling reporters “the gig is up.”

“We’re like the piggy bank that everybody’s robbing, and that ends.”

Trump left, skipping the climate change and oceans sessions, but Trudeau took the stage Saturday evening to proclaim all G7 leaders had reached a joint statement, calling the summit a success and outlining his own talks with Trump.

It drew Trump’s wrath. Referencing Trudeau’s account of pushing back at the U.S., he tweeted Trudeau made “false statements.” He scorned Trudeau as appearing “meek and mild” in their meetings, but was “dishonest and very weak.”

Canadian officials insist, and Trudeau’s spokesperson tweeted, that Trudeau said nothing he hadn’t already said in public or in private to Trump.

On Sunday, Trudeau wouldn’t directly respond to Trump’s comments, only tweeting that the meaningful work the G7 had done was all that matters.

Canadian government officials were equally careful.

One called Trump’s actions rude, another said the U.S. president had personally insulted the prime minister and he would not engage on that level, adding that Trudeau was mindful of Trump’s concern — stated through Kudlow — that Trump was angry he’d been made to look weak in advance of the North Korea summit.

In the end, a summit meant to patch trade rifts ended with a deeper acrimony and questions about the Canada-U.S. relationship and how it could recover in the crucial weeks ahead.

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