One of the biggest contradictions of the Trump presidency is his insistence on pushing “America First” policies while attempting to interact with multi-lateral institutions like NATO or the EU.
Trump doesn’t care if he’s popular with his G-7 partners from Britain, Canada, France, Germany, Italy, and Japan. He suddenly finds himself in a position where a potential global recession might bring down the U.S. economy as well. That means he’ll promote concerted, coordinated action with our allies to lessen the blow.
So far, they don’t appear to have much interest in dealing with the American president.
Trump, who arrived Saturday, and his counterparts are facing mounting anxiety over the state of the world economy and new tension on trade, Iran and Russia. Trump, growing more isolated in Washington, might find a tepid reception at the summit as calls increase for cooperation and a collective response to address the financial downturn. He did engineer a late change to the summit agenda, requesting a working session on economic issues.
The economic warning signs, along with Chinese’s aggressive use of tariffs on U.S. goods, are raising the pressure on Trump and his reelection effort. He intends to push allies at the summit to act to promote growth.
But Trump’s credibility as a cheerleader for multilateralism is in doubt, given that he has spent the first 2½ years in office promoting an “America First” foreign policy that [sic] relying on protectionist measures. Traditional American allies have come to expect the unexpected from this White House; increasingly they are looking elsewhere for leadership.
Trump held an unannounced meeting with French President Emmanuel Macron upon arriving in France. Just hours before their lunch meeting, Trump had once again threatened to slap tariffs on French wine. His threat was in response to France’s Digital Services Tax that targets American tech companies.
The president put the best face on his meeting with Macron:
The summit host said the two men were discussing “a lot of crisis” around the world, including Libya, Iran and Russia, as well as trade policy and climate change. But he also echoed Trump’s calls for Europe to do more to address the global slowdown, including by cutting taxes. “When I look at Europe, especially, we need some new tools to relaunch our economy,” Macron said.
Trump insisted that despite tensions, he and Macron “actually have a lot in common” and a “special relationship.” In a later tweet, he said: “Big weekend with other world leaders!
But underneath it all is the worrisome slowdown in several key economic sectors in Europe and the U.S. The White House says Trump will explore ways with his EU counterparts to spur growth in the U.S. and other key markets like Canada and Japan.
Trump has been jawboning the Fed to lower interest rates. When Fed Chairman Jay Powell indicated it wasn’t the time to lower rates, Trump referred to him as an “enemy.”
The biggest drag on the U.S. economy has been Chinese tariffs that have walloped American farmers and some American firms that import a lot of Chinese goods. So far, the impact has been softened by government payments to farmers. But as the trade war drags on, more and more Americans will feel it in their pocketbooks.
Trump should ink a quick deal with China and then declare victory. The resulting boost in trade will cement his re-election, after which he can keep working to make trade with China more fair.
But Trump thinks there’s still a chance his tariffs will hurt China a lot more than Chinese tariffs will hurt America. That may be, but Chinese President Xi won’t have to face a worried electorate next year. Trump isn’t as lucky.