Trump’s defiance has clear logic
The US will seek an economic advantage no matter who’s at the other side of the table
No matter how tempting it is to write off President Donald Trump’s G7 antics as the capricious acting out of a big, petulant baby, that won’t do the world any good as long as he runs the US. Like it or not, Trump is a world leader trying to position himself between the points of a triangle: established rules and alliances, US interests and his own personality traits.
It may appear that he’s tossed the rules and alliances out the window — at least that’s how it’s seen in Europe and now also in Canada. Trump has pulled the US out of one international agreement after another, hit allies with high import quotas and teased the flabbergasted leaders of the other six G7 leaders with outlandish proposals like readmitting Russia to the club or scrapping all tariffs altogether. The only reason to air these proposals, knowing they won’t be accepted, is to demonstrate a defiant disregard for the world order as we know it, a disregard that makes serious people suggest Russian President Vladimir Putin has something on Trump and is making him act in this disruptive way.
Trump, however, hasn’t quite rejected the rules. His tariffs are designed to withstand an attack in the World Trade Organisation because they’re ostensibly dictated by national security, something the WTO allows. It’s a legal ploy, but it could actually work. He’s gone back on agreements that weren’t ratified by Congress because he’s had the right to do so. And his persistent demands that North Atlantic Treaty Organisation allies spend 2 per cent of their economic output on defence, are meant to uphold rules which others are not keen to follow despite agreeing to them. In any rules-based set-up, some rules are more important than others at different moments; it’s just that Europe doesn’t like Trump’s priorities.
One could also argue that Trump hasn’t so much undermined US alliances as acted to bring into the open the allies’ dependence on the US and remind them they shouldn’t take US support for granted. This could end up reshaping the relationships as more transparently pragmatic and transactional ones than they are today. Trump’s bet is that the allies, especially Europeans, will opt to rally around the US anyway because they have no other viable options. Trump is taking a risk to assert an unabashed US hegemony, based more on US might and pressure than on persuasion and consensus.
As Henry Kissinger wrote in his 2014 book, World Order, “The essence of such upheavals is that while they are usually underpinned by force, their overriding thrust is psychological. Those under assault are challenged to defend not only their territory but the basic assumptions of their way of life, their moral right to exist and to act in a manner that, until the challenge, had been treated as beyond question. The natural inclination, particularly of leaders from pluralistic societies, is to engage with the representatives of the revolution, expecting that what they really want is to negotiate in good faith on the premises of the existing order and arrive at a reasonable solution.”
That’s what US allies have been trying to do with Trump; so far, they’ve refused to believe that the disruption, usually the province of ambitious outsiders, is coming from the very centre of the international order on which they’ve come to depend. They appear to believe they can negotiate better outcomes or wait Trump out, but Trump rejects both these scenarios, telling them, in effect, to submit or fight.
Absolute power
And then there are the personal likes and dislikes of Donald Trump — the man. He clearly resents what he must see as German Chancellor Angela Merkel’s intellectual condescension, and he treats long-winded French President Emmanuel Macron as something of a comic figure. His personal stylistic sympathies appear to lie with leaders who exert absolute power: Putin. He’s fascinated by their ability to make instant decisions; he thinks he can do business with them, rather than with Western leaders always looking over their shoulder and coming at him with all sorts of slow, fussy scenarios and complex proposals.
There’s not much for Trump’s partners to like about his approach to triangulation. He’s not interested in consensus, often impossible to pin down. But, unlike previous US leaders, he provides some clear answers to questions Kissinger asked of the US in his book: What does the US want to prevent or to achieve — alone if necessary or only as part of an alliance? What will the US do or not do when pushed by its allies?
Trump’s answers are simple. The US will seek an economic advantage no matter who’s at the other side of the table, and no kind of pressure will divert it from its pursuit of the advantage. These answers, in turn, lead to a question the G6 leaders and all US allies need to answer: Do they want to be led on these terms or do they have the guts to present an alternative? Leaving this question unanswered is an option, but only if one believes the US will not re-elect Trump or ever elect another Trump.
US President Donald Trump’s move to press ahead with an import tariff plan on steel and aluminium will have repercussions. Trading partners affected by the protectionist and politically-motivated policy will not remain silent. Perhaps, Trump is stirring things up to trigger a debate to improve the economic strengths of declining industrialised nations, who tend to slide back to bilateralism due to the stagnating multilateralism.
Although a backlash against US goods is being considered, Trump could well be doing nothing wrong. The business man turned-politician has constructed buildings and towers around the globe for several decades. That means he knows about the manufacturing and purchase prices of construction materials in US and foreign markets.
The fast-approaching mid-term US elections could have spurred Trump into action. The US president is perceptive enough to know that it is time to deliver on one of his key election promises — Make America Great Again. Short of options, he could be ramping up the pressure to strike better trade deals through a little-known loophole. The language of the legal provision under mutually agreed rules is so broad, self-judging and ambiguous that it is open to interpretation and thus can easily be abused. It can, for example, be argued that garment-producing industries would qualify for the exception on the ground that an army must have summer and winter uniforms. Not willing to bank on subsidies or price dumping, Trump is nevertheless determined to revitalise US industries that lost jobs due to evolving trade patterns and global competitiveness. Trump, the US Trade Representative and their advisers opted to play with trade policies in an unorthodox way. Though it’s rare, it has been done in the past. The US had invoked national security when it adopted a politically-motivated embargo on trade with Cuba in 1962, and Nicaragua in 1982. The World Trade Organisation (WTO), which promotes free trade, sets out how countries and trading blocs should frame and implement their foreign trade policies. Cross-border trade exchanges are thus subject to binding and enforceable rules. Exceptions, however, include emergency action on imports of particular products, and security-related items.
By choosing an action considered necessary for the protection of security interests, the Trump administration opted for the easiest way for imposing a legally defensible catch-all trade policy measure. The question is whether the unilaterally imposed military hardware-related measure can be justified.
Military allies and main trading partners of the US feel offended since they are now perceived as a threat to US national security. Neighbouring Canada and the European Union are also anxious. What is overlooked is the fact that it is the US consumers who will pay the import tariff when they decide to purchase a listed foreign or US product made of, or containing imported steel or aluminium. If enforceable rules and proportional punishment were absent, the resulting anarchy would inevitably lead to conflict. The WTO’s dispute settlement mechanism is the platform to resolve issues if a member breaches contractual obligations. So the EU took the matter to the WTO. But that was last week.
At the Quebec G7 meeting last week, which included the EU, Trump indicated he might be ready for dialogue on trade barriers, but it would come with a price since “the United States has been taken advantage of for decades and decades”. The G7 government leaders are yet to respond. If the US and EU fail to find common ground, as WTO litigation history shows, it can take several years before the case is settled.