There was no solution at the end of three-days of talks on Saturday between Trump’s treasury secretary Steve Mnuchin and six of the G7 finance ministers. The meetings were held in the Canadian ski resort town of Whistler. Those finance leaders are from the US’ closest allies around the world who have vented anger at the Trump administration for tariffs imposed on metal imports. According to a report by Reuters, this is setting the stage for a heated fight at next week’s G7 summit.
The report says that the other six G7 members asked Mnuchin to take “a message of regret and disappointment” to the President over his tariffs. Those allies are Canada, Mexico and the European Union (EU). President Trump’s announcement on Thursday was that he would impose 25 percent tariffs on steel and 10 percent on aluminum imports.
Almost immediately, US allies condemned the move promising to respond in kind. Trump claims that the reason for the tariffs is over national security, which experts doubt will hold water. In reality, it’s an effort to depress the import of foreign made vehicles, especially German cars. The Commerce Department began an investigation last week in order to make this case.
Trump’s tariffs triggered by NAFTA negotiation taking too long
The Reuters report referred to Commerce secretary Wilbur Ross’s negotiations on the National Free Trade Agreement (NAFTA). He blamed the negotiations taking too long as the reason Trump’s tariffs were triggered. The agreement was originally made to ease trade issues between with the US, Canada, and Mexico during the Clinton administration. But President Trump claims that NAFTA is killing jobs in the US.
The NAFTA talks, which started last year, are over the President’s claims that NAFTA is a “bad” deal and that he’s trying to get a better one for the US. Trump threatened early on to get rid of the NAFTA agreement altogether. But Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau were able to talk him out of it.
In the interview with Ross, the commerce secretary downplayed the impact that the retaliatory tariffs would have on the US. He kept saying throughout the interview that the retaliation would only impact a tiny fraction of one percent of the US economy. He also made the comparison saying that it would do nothing to an 18 trillion economy.
Trump’s unreasonable trade negotiation strategy
Pundits continue to say that the recent tariffs are more of Trump’s strong arm way of negotiating. Thus far, he’s done away with DACA, the Deferred Action for Childhood Arrivals program, the Paris Climate Agreement, and the Iran Nuclear Deal, otherwise known as the Iran deal.
One article by CNN shines a light on how the President negotiates and saying that he’s more like a hostage taker rather than a deal maker. In every deal he’s made, he either gets what he wants or terminates the deal. Which echoes the way everything seems to be about himself in Donald Trump’s world, from demanding he gets the most ice cream at the White House, to declaring himself the victim of the cancellation of the ABC show Roseanne due to star Roseanne Barr’s racist remarks, it’s all about “The Donald”, to the President.
Glen Whyte of the University of Toronto elaborated on President Trump’s technique on CBC News saying that the President negotiates under a “mythical fixed pie” model. This means getting a larger piece of a not-so-big pie. Overall Whyte rates Trump’s negotiating skills at a zero. Others who are familiar with Donald Trump’s negotiating tactics have said that he walks out of a deal with everything, making sure that everyone else gets less or nothing.
The G7 Is becoming the G6
Many experts have said that Trump’s tactics for a “better deal” will backfire. And US allies have already announced their retaliation against the move. PM Trudeau angrily fired back at Trump for the tariffs. European Commission President Jean-Claude Juncker also made a statement saying that they would introduce a settlement dispute to the World Trade Organization (WTO).
Their claim is that the move by the US is illegal. Canada, Mexico, and the EU have released their own list of items they will no longer import to the US. They hope that this will put pressure on the administration to restore some common sense but, given Trump’s negotiating history, this is unlikely. The view now is that the G7 or G6 plus one is rapidly becoming the G6 minus the United States.
Here is a report by CNN that sums up the initial move to retaliate.
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