By Jeff Mason and William James
BIARRITZ, France (Reuters) - U.S. President Donald Trump said on Sunday he was getting along well with Western allies at a G7 summit in France, dismissing reports of rifts among leaders and declaring that they "respect" the trade war between Washington and Beijing.
The G7 gathering is taking place against a backdrop of worries about a global economic downturn and coincides with an era of international disunity across an array of issues.
"Before I arrived in France, the Fake and Disgusting News was saying that relations with the 6 others countries in the G-7 are very tense, and that the two days of meetings will be a disaster," Trump wrote on Twitter shortly before meeting new British Prime Minister Boris Johnson.
"Well, we are having very good meetings, the Leaders are getting along very well, and our Country, economically, is doing great - the talk of the world!"
He began his first full day in the Basque coast resort of Biarritz with a show of amity. Addressing journalists as Johnson stood beside him, he said: "Do you know who this is? Does everybody know? He's going to be a fantastic prime minister I can tell you."
He said Britain would have a major trade deal with Washington after it leaves the European Union and, asked what his advice on Brexit was for Johnson, he replied: "He needs no advice, he is the right man for the job".
Nevertheless, policy differences over trade protectionism, climate change, Iran and France's push for a universal tax on digital technology giants loomed over the summit of the industrialized nations' leaders.
TRUMP: ALLIES RESPECT OUR TRADE WAR
Before leaving Washington Trump stepped up his tariff war with Beijing in a battle between the world's two largest economies that has spooked financial markets, and called on U.S. companies to move out of China.
He said G7 allies were not pressuring him to relent in his standoff with China, adding "they respect the trade war".
Still, Johnson voiced concern on Saturday about creeping protectionism and said those who support tariffs "are at risk of incurring the blame for the downturn in the global economy". Standing beside Trump on Sunday, he said: "Our view on the trade war: we're in favor of trade peace."
Underlining the multilateral discord, Trump also threatened his host on the eve of the summit, saying the United States would tax French wine "like they've never seen before" unless Paris dropped a digital tax on U.S. technology companies.
Leaping into the fray, European Council President Donald Tusk, who takes part in the G7 discussions, warned the EU would respond "in kind" if Trump acted on his threat.
"This may be the last moment to restore our political community," Tusk told reporters on Saturday, giving a bleak assessment of Western relations.
Looking to broaden the scope of the debate, Macron has invited several African leaders to discuss problems facing their continent, while leaders from India, Australia, Chile and Spain are due to attend a dinner on Sunday where the focus will be on the environment and other issues.
BREXIT SQUABBLES
Trump up-ended last year's G7 summit in Canada, walking out early and disassociating himself from the final communique having initially endorsed the document.
The delegations had barely arrived in Biarritz before differences were exposed, with senior U.S. officials accusing the host, French President Emmanuel Macron, of looking "to fracture the G7" by focusing on "niche issues" rather than major global concerns.
France denied this, pointing to Sunday's initial session covering the economy, trade and security - areas that used to draw easy consensus but are now sources of great friction.
Overnight, Trump wrote on Twitter that lunch with Macron was the best meeting the pair had yet had, and that a summit dinner with world leaders on Saturday "went very well".
While the transatlantic rift is the most stark, there are also deep divisions within the European camp, with Johnson making his G7 debut at a time when he is struggling to persuade EU capitals to renegotiate Britain's exit from the bloc.
Johnson and Tusk, who are due to talk on Sunday, sparred ahead of the meeting over who would take the blame if Britain leaves the EU on Oct. 31 without a Brexit agreement acceptable to both sides.
Macron added to the internal EU strains by unexpectedly threatening on Friday to block an EU trade deal with a group of South American states over Brazil's handling of fires that are ravaging the Amazon (NASDAQ:AMZN) rainforest.
Germany and Britain both voiced deep concern about the fires, but disagreed with Macron on how to respond, saying shooting down the ambitious Mercosur trade accord would not help save the Amazon.