Trump's anger at the G7 summit

Published 12.06.2018 01:38

President Trump may have been furious with Western leaders and his country's closest allies at the G-7 summit but the U.S. will carry the burden of Trump's decisions on tariffs

It appears that U.S. President Donald Trump thinks Canadian Prime Minister Justin Trudeau is dishonest and weak. He also believes that the Canadians had burned down the White House, which it was in 1814, but the Canadians had nothing to do with it. It was the British troops. As a matter of fact, Canada didn't even exist back then, it was a British colony. Though we don't know whether Trump is aware of these historical facts, we can be quite sure that he is angry at Canada and its prime minister.

Trump is angry because he didn't get what he wanted at the recent G-7 summit. In retaliation to the new U.S. tariffs on steel and aluminum imports, Canada and some European countries decided to impose extra tariffs on numerous U.S. goods. For instance, Canada slapped a 270 percent tariff on U.S. dairy products.The U.S. president only thinks about his electoral base and tries to implement measures that he claims will protect local producers. The problem is if this trend continues, it will be hard to find a country willing to buy American products. Maybe the U.S. administration is confident that the U.S. domestic market is big enough to sustain the production, but for how long?

If every developed country starts imposing huge tariffs on American goods, they will eventually turn to other countries for trade.For agricultural products, there are many options. Canada may buy what it needs from Mexico and Brazil instead of trading with the U.S. However, this is a bit more complicated when it comes to industrial products and the defense industry in particular. If the trade wars start impacting weapons sales, the U.S. may seriously suffer. What if Canada or other NATO member countries decide to buy their weapons from alternative sources, let's say from China, in order to punish the U.S.? Besides, a number of European countries may also decide to improve their national defense industry to reduce their dependency on American weapons.

Trump says the new tariffs are being imposed to protect the U.S. economy, but if he insists on going down this path, one day nobody will need the U.S. It is interesting to observe how the U.S. is deliberately offending its traditional allies and pushing them away. In that context, wouldn't European countries want to mend their ties with Russia? We know that Putin will not play down a possible rapprochement with Europe. Turkey, a NATO member, is already purchasing Russian missile defense systems and other members of the organization might want to follow the same example.

Trump's attitude may help the American economy for a while, at least in the short run. Nevertheless, in the long run, even the American defense industry will suffer. Saudi Arabia and Israel may continue to buy weapons from the U.S., but one day, even they may feel the need to balance their relationship with the U.S. and with Russia or China.

Trump's current policy is a new version of mercantilism. He believes that he has the right to punish other developed countries using mercantilism, but historical records show that mercantilist economic policies lead, sooner or later, to war. For now, he wants the third countries to wage wars with each other because he thinks that will allow him to sell them more weapons. This is nothing less than playing with fire – one that can eventually burn the U.S. too. The attitude of pushing the allies away and punishing them with economic measures only serves Russian interests. All these countries may eventually get closer to Russia, indeed. Is this what the Trump administration really wants?

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