There has never been a disaster like the G-7 meeting that just took place. This wasn’t a tough stance on behalf of American interests, it was a declaration of ignorance and policy insanity.
For all their pomp, most multilateral summits are boring and of little consequence. I once spoke to a State Department official who had a role in putting these meetings together; he described his job as “policing the nuances,” which gives you an idea about how much is normally at stake.
Occasionally, however, such meetings do have real consequences, good or bad. The 2009 G-20 summit, at which nations agreed to provide economic stimulus and loans to troubled countries in the face of the financial crisis, played at least some role in helping the world avoid a full replay of the 1930s. The 2010 summit, by contrast, effectively endorsed a turn to austerity that significantly delayed recovery and partially set the stage for the rise of political extremism.
Still, there has never been a disaster like the G-7 meeting that just took place. It could herald the beginning of a trade war, maybe even the collapse of the Western alliance. At the very least it will damage America’s reputation as a reliable ally for decades to come; even if President Donald Trump eventually departs the scene in disgrace, the fact that someone like him could come to power will always be in the back of everyone’s mind.
What went down in Quebec? I’m already seeing headlines to the effect that Trump took a belligerent “America first” position, demanding big concessions from our allies, which would have been bad. But the reality was much worse.
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He didn’t put America first. Russia first would be a better description. And he didn’t demand drastic policy changes from our allies; he demanded that they stop doing bad things they aren’t doing. This wasn’t a tough stance on behalf of American interests, it was a declaration of ignorance and policy insanity.
Trump started with a call for readmitting Russia to the group, which makes no sense at all. The truth is that Russia, whose gross domestic product is about the same size as Spain’s and quite a bit smaller than Brazil’s, was always a ringer in what was meant to be a group of major economies. It was brought in for strategic reasons, and kicked out when it invaded Ukraine. There is no possible justification for bringing it back, other than whatever hold Vladimir Putin has on Trump.
Then Trump demanded that the other G-7 members remove their “ridiculous and unacceptable” tariffs on U.S. goods — which would be hard for them to do, because their actual tariff rates are very low. The European Union, for example, levies an average tariff of only 3 percent on U.S. goods. Who says so? The U.S. government’s own guide to exporters.
True, there are some particular sectors where each country imposes special barriers to trade. Yes, Canada imposes high tariffs on certain dairy products. But it’s hard to make the case that these special cases are any worse than, say, the 25 percent tariff the U.S. still imposes on light trucks.
So what on earth was Trump even talking about? His trade advisers have claimed that value-added taxes, which play an important role in many countries, are a form of unfair trade protection. But VATs don’t convey any competitive advantage — they’re just a way of implementing a sales tax — which is why they’re legal under the World Trade Organization.
Trump might not even have been thinking about VATs. He may just have been ranting. After all, he goes on and on about other vast evils that don’t exist, like a huge wave of violent crime committed by unauthorized immigrants.
Was there any strategy behind Trump’s behavior? It was pretty much exactly what he would have done if he really is Putin’s puppet. Alternatively, maybe he was just acting out because he couldn’t stand having to spend hours with powerful people who will neither flatter him nor bribe him.
This was an utter, humiliating debacle. You really have to wonder what comes next. One thing’s for sure: It won’t be good.