The leaders discussed trade in their afternoon group meeting, touching on the World Trade Organization, the North American Free Trade Agreement, and the steel and aluminum tariffs that Trump recently imposed on Canada and the European Union, the Canadian official said.
Merkel described the joint communiqué Trump refused to sign, despite America's co-authorship, as "arduously negotiated".
Merkel singled out Macron's hope for a jointly managed investment budget of "one or two percent of gross domestic product" in the single currency area as overambitious.
"I'm not saying that none of the things he wants will happen", Merkel said in an interview with ARD public television.
The rules-based order must be defended, she said, and disputes could not be solved by nations taking "unilateral actions against their partners".
"As Canadians, we are polite, we're reasonable, but also we will not be pushed around", Trudeau said.
European leaders met ahead of the formal kickoff of the G7 summit where Merkel proposed a so-called "shared evaluation mechanism" on USA trade, which was enthusiastically backed by French President Emmanuel Macron and European Commission President Jean-Claude Juncker, according to a French official who briefed reporters on the meeting.
Trump was attending the G7 Summit in Canada, but left the meeting early announcing via a tweet "that he was backing out of the joint communique".
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On Saturday morning Trump said he was open to getting rid of the tariffs if the other countries agreed to a more pure form of free trade.
"We're going to deal with the unfair trade practices".
The summit did not mark the end of the transatlantic partnership between Europe and the U.S., Merkel said.
"We had been talking seriously about key issues, we had reached an agreement and then the way the President withdrew his support, through a tweet, was like a cold and even depressing shower", Merkel told local media.
The photo became a sensation online, and many observers felt it underscored the growing tension between Trump and the other G7 leaders.
President Donald Trump shares a toast with French President Emmanuel Macron during the State Dinner for Macron and Mrs. Brigitte Macron of France during a visit to The White House, April 24, 2018 in Washington, DC.