Developments on trade as Trump heads to Canada for summit

What's happening:

With his new tariffs increasing U.S. isolation, President Donald Trump will head to Canada on Friday for a meeting of the Group of Seven industrialized nations. The White House is expecting a chilly reception from Canada and West European countries, already frustrated over Trump's withdrawal from the Paris climate accord and the Iran nuclear agreement. German Chancellor Angela Merkel previewed the dynamics by telling Germany's parliament that "it is apparent that we have a serious problem with multilateral agreements here, and so there will be contentious discussions."

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At the same time:

The United States and China reached a deal Thursday that allows the Chinese telecommunications giant ZTE Corp. to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let U.S. regulators monitor its operations. The fine comes on top of $892 million ZTE has already paid for breaking U.S. sanctions by selling equipment to North Korea and Iran. The Commerce Department said that ZTE must also put $400 million in escrow — a sum it would forfeit if it violated the agreement.

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The backdrop:

The Trump administration has imposed tariffs on imports of steel and aluminum, saying that reliance on foreign metals poses a threat to U.S. national security — a position that has enraged U.S. allies including the European Union, Japan, Canada and Mexico. Trump is also trying to renegotiate the North American Free Trade Agreement to try to shift more investment and auto production to the United States and away from Mexico. Those three-country talks have stalled. In the meantime, the United States and China have threatened to impose tariffs on up to $200 billion worth of each other's products in a dispute over China's strong-arm tactics to supplant U.S. technological supremacy.