President Trump has been sending somewhat mixed signals on trade for some time, making one claim and acting on another, but perhaps the most confounding came at the G7 summit in Canada this weekend: the president said his end aim for trade is to eliminate all barriers—including tariffs.
“Ultimately, that’s what you want,” CNN reported Trump as saying. “You want 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.”
Coming from the man who has sent new tariffs barreling into the global trade sphere and deflected when they came back the United States’ way, the remarks made during a news conference at the G7 summit may have surprised some.
Trump said he’d thrown the idea of eliminating tariffs to his G7 peers, and CNN quoted the president as saying, “I did suggest it…I guess they are going to go back to the drawing board and check it out.”
The tariff elimination could certainly serve to quiet what’s evolving into a full-blown trade war between the U.S. and its most important trading partners, provided the president proves to be serious about the issue.
What Trump doesn’t want—and he made that clear before leaving the summit—is any retaliation to U.S.-imposed tariffs, which he deems as solely designed to bring trade back in balance.
“If they retaliate, they’re making a mistake,” CNN reported the president as saying.
But what garnered the most attention was Trump’s bitter back and forth with Canadian prime minister Justin Trudeau.
Following Trump’s enforcement of 25 percent tariffs on steel imports and 10 percent on aluminum coming in from Canada, Mexico and the EU after an exemption period failed to deliver the president’s sought-after results (which has largely been a bending to more favorable trade terms for the United States), Trudeau has been speaking up about Canada’s intention to retaliate. Mexico and the EU have done the same.
At a news conference in line with the G7 summit on Saturday, Trudeau said very pointedly that Trump’s move on tariffs aimed at Canada was “insulting” and not favorable to already strained renegotiations on the North American Free Trade Agreement. Further to that, he said, “It would be with regret, but it would be with absolute certainty and firmness that we move forward with retaliatory measures on July 1, applying equivalent tariffs to the ones that Americans have unjustly applied to us.”
Tweets targeted squarely at Trudeau came in a two-day stream from President Trump’s Twitter feed: “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 Communiqué as we look at tariffs on automobiles flooding the U.S. Market!”
The G7 Communiqué is a joint statement from the seven countries that comprise the group—the United States, Canada, the U.K., France, Germany, Japan and Italy—outlining agreed upon priorities emerging from the meeting. Sources told CNN the U.S. was demanding about what went into the Communiqué, so it came as a surprise that Trump said the U.S. wouldn’t endorse it.
Trump followed that tweet with one calling Trudeau “very dishonest” and “weak” and noting that the U.S. tariffs come in response to “Canada’s 270% on dairy!”
The issue of trade, not surprisingly, was the main area of focus for the G7 summit, and Trump reinforced his concern for the U.S. being treated unfairly, referring to the country he leads as “the piggy bank that everybody’s robbing,” adding, “and that ends.” During the same conference, Trump continued, referring to U.S. efforts on trade, “We are talking to many countries, we are talking to all countries and it’s [the unfairness] going to stop or we’ll stop trading with them.”
Tacking tweets onto his news conference comments, Trump said, “Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!”
Though the unfriendly banter between Trump and Trudeau may have overshadowed much of the Summit, at least six economic leaders appear to have agreed that trade needs work and tariffs aren’t the answer.
The Communiqué released Saturday said: “We acknowledge that free, fair, and mutually beneficial trade and investment, while creating reciprocal benefits, are key engines for growth and job creation” From there, the G7 said it would continue to fight protectionism, looking to a rules-based international trading system for guidance. The group also committed to modernizing the WTO to make it “more fair as soon as possible.” On tariffs, the G7 said, “We strive to reduce tariff barriers, non-tariff barriers and subsidies.”