trade war

Trump Threatens to End All Trade With Allies

The all extremes, all the time, president. Photo: Saul Loeb/AFP/Getty Images

Leaving the G7 summit on Saturday, President Trump said that the U.S. might end all trade with America’s closest allies if those countries don’t submit to his demands over reduced trade barriers. Trump also confirmed that he had told the leaders of Britain, France, Germany, Japan, Canada, and Italy that there should be no tariffs between them and the U.S. of any kind. Whether Trump’s characteristically hyperbolic threat, or overarching proposal, will be taken seriously is another matter.

Referring to what he called “ridiculous and unfair” tariffs on U.S. imports, Trump said, “It’s going to stop — or we’ll stop trading with them. And that’s a very profitable answer, if we have to do it.”

“We’re the piggy bank that everybody is robbing, and that ends,” added Trump, who also repeated his exaggerations of U.S. trade deficits by tens or hundreds of billions of dollars. The president framed his trade attacks as a defense of U.S. national security, citing the weakening of the country’s “balance sheet” as the corresponding threat.

Regarding the elimination of tariffs, Trump confirmed that he had suggested totally free trade among the G7 during the summit, explaining that, “Ultimately, that’s what you want. You want a tariff free. You want no barriers. And you want no subsidies. Because you have some cases where countries are subsidizing industries and that’s not fair.”

But in regard to his his administration’s ongoing effort to renegotiate NAFTA with Canada and Mexico — an agreement aimed at literally promoting free trade between the U.S. and those countries — Trump suggested the U.S. would be better off without the pact at all.

Trade tariffs around the world have been dropping as a result of agreements like NAFTA. The average tariff on imported goods to the U.S. is 2.4 percent, while Canada and the European Union impose average tariffs of around 3 percent, according to the World Trade Organization. Manufacturing makes up only 10 percent of the U.S. economy.

Even if Trump’s proposal is taken at anywhere near face value, it’s not clear how such an agreement would or could be reached and what impact it would have — nor is it clear that the president understands any of the trade numbers he tosses around to begin with.

Trump left the G7 while it was still underway so that he could travel to Singapore to meet with North Korean dictator Kim Jong Un. The trade-warring president claimed that his relationship with other G7 leaders was “a 10,” but the contentious summit clearly proved otherwise.

The Trump administration recently imposed steep tariffs on steel and aluminum imports from the EU and Canada, having already imposed them on Japan. Those countries, along with Mexico, have pledged to impose their own higher tariffs on billions of dollars of U.S. imports in retaliation, as America’s allies appear to have become fed up with the combative and chaotic Trump administration, and are shifting their strategy from trying to reach and educate Trump about the complexities of international trade, to seeking to punish the U.S. economy instead.

“If they retaliate, they’re making a mistake,” Trump said on Saturday, meaning that he believes U.S. allies have more to lose than gain by entering into a trade war with the U.S.

Trump not only staked out improbable — if not impossible — positions on trade to an already skeptical collection of world leaders at the meetings, but endorsed readmitting Russia to the group, essentially brushing off the reason it was kicked out — Russia’s 2014 annexation of Crimea from Ukraine. (Italy, a country with close ties to the Kremlin, was the only member of the G7 to support Trump’s idea.) Considering Trump’s ongoing efforts to upend long-standing global alliances and international agreements, it seems likely that the other leaders would be more inclined to exclude the U.S. from future meetings than re-include Russia.

(Update: Trump’s “10” relationship with his G7 counterparts became an even bigger fantasy not long after the press conference when the president started rage-tweeting at Prime Minister Trudeau from Air Force One.)

Trump Threatens to End All Trade With Allies