Trump stuns allies with call for G7 tariff-free zone

Donald Trump stunned his G7 allies on Saturday by suggesting the group could become a zero-tariff zone, even as he warned that if partners do not reform their trade practices they could lose access to the US market. 

The US president made the surprise comments as he was leaving a fractious gathering of the Group of Seven industrialised nations in Canada.

“No tariffs, no barriers — that’s the way it should be. And no subsidies,” Mr Trump said at a brief press conference before departing from the G7 summit at the Québec resort town of La Malbaie. “We’re like the piggy bank that everybody’s robbing, it’s got to end.”

The idea left western allies flummoxed given that Washington has just announced punitive metal tariffs against major partners including the EU and Canada — prompting concerns about a global trade war. One European official at the talks said the response to the president’s proposal was one of surprise and scepticism. Mr Trump himself said that his partners were now going to have to go “back to the drawing board”.

The US president first floated the idea of a G7 free-trade zone on Friday afternoon behind closed doors at a meeting on the global economy between the leaders, according to officials. It came after Mr Trump wrongfooted his allies by suggesting shortly before he arrived at the summit that Russia should be readmitted to the G7.

Friday’s meeting was dominated by an argument over the steel and aluminium tariffs that the US had just announced against the EU — prompting looming retaliatory measures expected next month.

In the trade discussions Mr Trump reiterated his long-held concerns over the US trade deficit and what he views as unfair treatment of his country. 

Other leaders countered with their own statistics and analysis, including on the scale of the EU-US trading relationship and the jobs at stake, according to officials who followed the talks.

The EU floated the idea of a joint assessment of the trade situation as part of an effort to resolve differences. 

Mr Trump went around the table listing his economic grievances against the other six leaders in terms of the US trade deficit and tariffs and how much US military support they receive, according to one person at the meeting.

One official claimed that the discussions had been measured, but another said there had been “choppy” clashes between the world leaders in the room.

By announcing the idea of a tariff-free G7 to the world’s press Mr Trump will prompt a scramble to work out whether his intentions are entirely serious. Larry Kudlow, national economic adviser to the president, also told reporters: “We had lengthy discussion about [the idea]. All present said ‘reduce those barriers. In fact go to zero, zero tariffs, zero no-tariff barriers, zero subsidies”.

John Weekes, a trade policy expert at Bennett Jones, said he did not think Mr Trump’s idea was credible. But he added that given it was orientated in a more positive direction towards trade liberalisation his interlocutors should not dismiss it outright either. “To engage in that kind of discussion could be valuable even if it doesn’t lead anywhere,” he said. 

In his final remarks Mr Trump insisted the G7 gathering had been a success even as he left the summit early as he prepares for his historic meeting in Singapore next week with North Korean leader Kim Jong Un.

Speaking earlier on Friday Donald Tusk, the European Council president, did nothing to disguise the extent of the rift between the US and its key partners, as he warned that the “rules-based international order” was being challenged by the Americans, its traditional guarantor. “We will not stop trying to convince President Trump that undermining this order makes no sense at all,” he said.

Meanwhile it was not clear whether the G7 would conclude on Saturday evening with the usual “communiqué” joint agreement — given the splits between Donald Trump and the other six national leaders.

A further disagreement came as the US president privately voiced opposition to further measures to prevent plastic pollution in oceans — put forward by Justin Trudeau, president of Canada.

The US president left early on Saturday morning, skipping a meeting to address environmental concerns.

Mr Trump was also reportedly concerned about the use of a commitment in the draft communiqué to the “rules-based international system”.

Like it? Share with your friends!

22139 shares, 848 points

What's Your Reaction?

Fake Fake
Epic Epic
Like Like

Comments 0

Your email address will not be published. Required fields are marked *

Trump stuns allies with call for G7 tariff-free zone

MainStreet Econ

Join the MSE Community

reset password

Back to
MainStreet Econ
Choose A Format
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Voting to make decisions or determine opinions
Formatted Text with Embeds and Visuals
The Classic Internet Listicles
Open List
Open List
Ranked List
Ranked List
Youtube, Vimeo or Vine Embeds
Photo or GIF
GIF format

Send this to a friend