Economy & Business

Canada Isn’t the Enemy

President Donald Trump is greeted by Canada’s Prime Minister Justin Trudeau during the official welcoming ceremony at the G7 Summit in the Charlevoix town of La Malbaie, Quebec, Canada, June 8, 2018. (Christinne Muschi/Reuters)

President Trump exited the G-7 summit like no president before him, blasting an allied head of state and torpedoing a joint communiqué.

This is not the end of the Western alliance, as some heavy-breathing commentators have declared. The alliance is firmly ensconced in a network of common interests, values, and history — it would take much more than trade disputes and a bad meeting to scuttle it. But Trump’s shots at Canadian prime minister Justin Trudeau and his general churlishness served no useful end.

We have very little use for Trudeau, that avatar of chic progressivism, or for Trump’s other foil, Angela Merkel, the very embodiment of the short-sighted and high-handed European establishment.

Neither of them have grounds to present themselves as purist defenders of free trade. It’s not just Canada’s protection of its dairy industry, which has gotten attention in recent days, but its subsidies for its aerospace company Bombardier and its drug pricing and patent policies — all of which are significant distortions of the market to suit the country’s perceived economic interests.

For her part, Merkel is running, via the EU, a zollverein, or a customs union with a common tariff against countries outside the charmed circle (especially on agriculture). Germany makes sure that the arrangement serves its particular trade and financial interests, which is one reason that the EU is in a constant state of crisis — it doesn’t serve the interests of other European countries nearly as well, and occasionally their electorates notice.

Trade disputes with our allies distract attention from the main challenge to the international trading order, which is China.

We also don’t have any problem with a U.S. president running against the tide of polite international opinion. Indeed, we consider it part of the job description. Trump is to be commended for pulling out of the Paris Accords and the Iran deal, both decisions that our allies opposed. But none of this justifies needless acrimony.

First, trade disputes with our allies distract attention from the main challenge to the international trading order, which is China. The Information Technology and Innovation Foundation ranks countries on their mercantilism. China is far and away the worst offender — Canada and Germany are pikers by comparison. If we are truly going to get China to abandon its most objectionable practices, we will need the allies we are now alienating with steel and aluminum tariffs to help us pressure Beijing, which, by the way, is using its wealth to try to expel us from East Asia.

Second, if we are going to get our allies to open up more on trade, we need to make the argument. The administration has invested very little effort in highlighting trade barriers we’d like to see eliminated in places such as Canada and Germany. In fact, our steel and aluminum tariffs have branded us as the protectionists. Unfortunately, no one believes in the sincerity of Trump’s suggestion that the G-7 adopt a “no tariff” policy, and his team has no strategy to follow through, even if this really is the president’s goal.

Third, other countries have their pride. Insulting an allied leader will naturally get his back up and those of his countrymen. It’s also perverse to slap around Justin Trudeau and never say a discouraging word about President Xi or President Putin. (Trump’s off-hand suggestion that Russia, fresh off an attempted assassination on British soil, rejoin the G-7 was equally perverse.)

Trump has been, as the cliché goes, a diplomatic disrupter. Some of this is welcome. Our NATO allies should spend more on defense. The U.S. government shouldn’t be reflexively supportive of the E.U. project, as it has been to this point. But there’s a difference between a well-thought-out challenge to unsatisfactory aspects of the status quo and sheer pique.

NOW WATCH: Trump Rails Against ‘Unfair’ Trade At G7 Leaders Summit


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