Angry Trump torpedoes G7’s hard-won trade harmony
By Trump capped a fractious meeting with G7 allies by refusing to back a joint statement from the group that had pledged to fight protectionism,blaming “false statements” from Canada’s prime minister Justin Trudeau and ratcheting up tensions on tariffs.
In a tweet on Saturday evening, Mr Trump wrote: “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!”
It was a remarkable reversal, as officials had believed the usual “communique” joint agreement had already been agreed by all the major parties following laborious negotiations and despite earlier splits between Mr Trump and the other six national leaders.
Among other things, the communique said signatories would “strive to reduce tariff barriers, non-tariff barriers and subsidies.” The angry retort, fired off after Mr Trump had already decamped the gathering of the Group of Seven industrialised nations in Canada, came in response to comments from Mr Trudeau that the US president’s tariffs were “insulting” and that he would not be “pushed around”. The president’s intervention marks a painful setback for America’s G7 allies, who had hoped to finish their summit with a display of unity following a bad-tempered lead-up to the summit.
But in a press conference before his departure, Mr Trump struck a defiant note over trade, warning that if US partners do not reform their trade practices they could lose access to its market. “No tariffs, no barriers — that’s the way it should be. And no subsidies,” Mr Trump said before departing from the G7 summit at the Québec resort town of La Malbaie for Singapore, where he is due to hold his historic meeting with North Korean leader Kim Jong Un.
“We’re like the piggy bank that everybody’s robbing, it’s got to end.” The disarray at the end of the G7 will deepen concerns about the direction trade policy is now taking and the prospects for co-operation between key advanced economies.
“His decision to withdraw his acceptance of the communique is emblematic of his general approach to policy: if you offend him, he is prone to use policy measures as instruments of personal vengeance and pique,” said Daniel Price, managing director at Rock Creek Global Advisors and a former US representative at summits under George W Bush.
“The Administration’s unilateral actions on trade against US allies are eroding longstanding bonds of mutual trust.” In his closing press conference Mr Trump insisted relations with his partners were in top shape, giving them a “ten” rating and referring to a selection of counterparts by their first names. But he also spoke of the “ravages” of other nations’ tariffs as he demanded US partners drop their barriers. He repeated his recent complaints over Canadian protections for its agricultural sector, while accusing the EU of pursuing “brutal” trade policies towards the US. “It’s going to stop or we will stop trading with them,” he said.
“And that’s a very profitable answer if we have to do it.” In a worrying shot across his counterparts’ bows, Mr Trump’s tweet raised the idea of auto tariffs. Last month, his administration began a probe into imports of cars, trucks and automotive parts on national security grounds.
While Mr Trump repeatedly portrayed the US as a victim of other countries’ trade practices, economists point out that average tariffs are set at similar levels in the US and major partners. “A lot of these countries actually smile at me when I am talking. And the smile is ‘we couldn’t believe we got away with it’,” Mr Trump insisted. “If it’s not going to change we are not going to trade with them.” Earlier, behind closed doors, Mr Trump went around the table listing his economic grievances against the other leaders in terms of the US trade deficit and tariffs and how much US military support they receive, according to one person at the meeting. One official said there had been “choppy” clashes between the world leaders in the room.
Other leaders countered with their own statistics and analysis, including on the scale of the EU-US trading relationship and the jobs at stake, according to officials who followed the talks. Recommended US trade Economists reject Trump claims of unfair trade system. The EU floated the idea of a joint assessment of the trade situation as part of an effort to resolve differences.
During the meetings Mr Trump further wrong-footed allies by insisting he wanted to see the G7 turn into a tariff-free zone, with all barriers and subsidies stripped away.
The idea left western allies flummoxed given that Washington has just announced punitive metal tariffs against major partners including the EU and Canada — prompting concerns about a global trade war. Peter MacKay, a former Canadian foreign minister under Stephen Harper who is now at Baker McKenzie, said the president’s comments carried an “ominous undertone” given they were paired with threats to trading partners that Mr Trump accuses of treating the US unfairly.
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