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Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

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Trade War Tensions Heat Up Following G7 Summit

Trump

A photograph shared by German chancellor Angela Merkel largely sums up the disintegration of the G7, which turned into a juvenile sparring match that now threatens to render America—once the poster boy for global trade—an isolated nation that isn’t likely to get much support for anything in the future.

(Click to enlarge)

Photo by German cabinet official photographer Jesco Denze and shared widely on social media, beginning with Merkel’s official Instagram account

From Trump’s perspective, the G7 was a smashing hit. “I’d say the level of relationship is a 10. We have a great relationship. Angela, and Emmanuel and Justin … I would say the relationship is a 10,” he told a press conference right before leaving the G7 venue in Canada.

His comments clearly left everyone else in the room wondering if they had attended the same venue.

Trump has accused the Canadian prime minister of “betrayal”, and his attempt to get Russia back into the G7 pleased no one—in fact, it left the world confused as to whether sanctioned Russia is now enemy number one or ally number one for Washington.

And all this against a backdrop of scathing steel and aluminum sanctions against U.S. allies, and the unilateral withdrawal from the Iran nuclear deal.

Thus, the world’s most important economic stage has been reduced to a side show of serious consequences.

Canada was on the receiving end of a significant amount of Trump’s aggression as foreign policy and trade becomes guided by fragile ego rather than economics or national interest.

Trump called Canadian Prime Minister Justin Trudeau “dishonest and weak”.

He said “fair trade is now to be called fool trade”.

And he claimed that the U.S. is funding “close to the entire cost of NATO” to help protect countries that “rip us off on trade”.

In truth, though, the U.S. contributes around one-fifth of NATO’s direct funding. Germany’s ready to contribute more, says Merkel, but the trade war isn’t going to fly, regardless. There will be consequences for the U.S. Related: Emerging Currencies Struggle To Gain Footing

And Trump refused to sign a joint G7 communiqué, instead tweeting:

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Europe and Canada are livid, and they will retaliate with tariffs in kind. They’re responses indicate what a desperately low place the world stage has reached:

French President Macron suggested that international cooperation could not be “dictated by fits of anger and throwaway remarks”, while form Belgian prime minister Guy Verhofstadt tweeted:

(Click to enlarge)

(Click to enlarge)

Trump was apparently feeling belittled by Trudeau. He didn’t manage to secure a public parade for his arrival, and there was no red carpet. He wasn’t feted, and he was contradicted on trade tariffs, along with a polite Canadian threat to retaliate.

Trump “is not going to let a Canadian prime minister push him around,” Larry Kudlow, Trump’s economic advisor, told CNN’s “State of the Union” program. “He is not going to permit any show of weakness on the trip to negotiate with North Korea.”

But how unfair is trade with Canada, really?

According to U.S. Trade Representative figures, it’s pretty balanced:

(Click to enlarge)

If this is all about the North Korea Summit tomorrow in Singapore, then it’s anyone’s guess whether Trump’s antics will impress Kim Jong-Un or the reverse. The million-dollar-nuclear-war question is whether two unhinged leaders will see eye to eye. Will Kim view Trump’s G7 antics as a show of strength, or will he see an America isolated and with no trusted allies left?

By Charles Benavidez for Safehaven.com

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