Canadian Prime Minister Trudeau is indignant over the recent American imposition of tariffs on steel and aluminum. Other members of the G7 are equally angered at the move but it seems that all are ignoring the tariffs they’ve placed on imports from the U.S. The hypocrisy is obvious when each has for years practiced a protectionist policy. Canada charges a 270% tariff on American dairy products as well as other American imports. Now that Trump has pushed for the steel and aluminum tariffs Trudeau is threatening to raise import tariffs even further. The imbalance with our closest neighbors is particularly cruel since we have generally welcomed huge amounts of goods from both Canada and Mexico. Our “friendly” neighbors do not reciprocate and are upset when we ask for equal treatment. Worldwide we have a $500+ billion trade deficit and China is probably the worst offender with respect to the imbalance. China not only limits imports of materials, but they have been stealing our technology for decades with impunity. Now that our president has said this must end, everyone is upset. Even the American press is attacking the President for attempting to level the playing field. The media has never been the friend of this president and continue to criticize his every move. They are quick to point out that past ventures into tariffs have been unsuccessful in protecting American industry. Comparisons may not be applicable because there are differences with today’s efforts from previous tariff attempts. Our domestic steel industry has been decimated by cheap imported steel. We have gotten to the point of dependency on foreign imports for much of our basic manufacturing. It isn’t wise to be held hostage to foreign suppliers who could raise prices or withhold supplies at any time. It is an issue of national security; losing our steel and aluminum industries would impair our ability to build planes, ships and tanks for national defense.
One big difference today is in the man occupying the White House. President Trump is the master negotiator and is using tariffs as a bargaining chip. Our allies need the U.S. because we are a lucrative market for their products. More importantly members of the G7 are relying on the military might of the United States for protection. We are the one ally no one in the free world can live without. President Trump could potentially threaten to reduce our defense forces deployed in G7 countries or simply reduce funding to NATO or Japan. With the nearby danger in North Korea, Japan is particularly dependent on the U.S. military umbrella. The President is asking only for fair trade in the international marketplace. Members of the G7 need America more than we need them and I’m confident in President Trump’s bargaining skills. The anti-Trump sentiment in the media will continue to attack the idea of tariffs regardless of the outcome. One thing is for sure, the G7 is about to get schooled.