President Donald Trump stunned the G-7 on Saturday in Canada with his call for a complete end to all tariffs — and non-tariff barriers to trade, like government subsidies.
“Ultimately that’s what you want,” the president said at a news conference in Charlevoix. “You want a tariff-free [arrangement]. You want no barriers. And you want no subsidies. Because you have some cases where countries are subsidizing industries and that’s not fair.”
Trump’s proposal was shocking, coming just days after he applied tariffs on steel and aluminum imports from the European Union, Canada, and Mexico. The other six members of the G-7 came to Charlevoix prepared to blast the U.S. for protectionism — and President Trump simply called their bluff.
Not one of the other leading economies embraced Trump’s proposal. As President Trump has often complained, they have their own tariffs and subsidies to protect powerful domestic constituencies and special interests, despite professing their commitment to free trade in high-minded terms.
Trump may not have been serious. But the brilliance of his proposal is that he can always say he made it, and it was rejected. He can use that to justify protectionist measures he takes later.
Indeed, that is exactly how Larry Kudlow, Director of the National Economic Council, used Trump’s gambit on CNN’s State of the Union on Sunday morning to respond to criticism from Canadian Prime Minister Justin Trudeau and Sen. John McCain (R-AZ).
“President Trump … went through those two days of conference talking about the need for a new free trade system — no tariffs, no tariff barriers, no subsidies. He is a trade reformer, as I have argued again and again, and he put that out,” Kudlow said, adding: “President Trump made it clear time and again in those two days outside of Quebec [City] that he wants to reinstitute a process of free trade, no tariffs, no tariff barriers, no quotas and subsidies — he was absolutely consistent during this entire trip.”
Trudeau and the rest of the G-7 failed to seize on Trump’s proposal. After that, Trudeau’s attack on the president — after a joint communiqué had been signed, and after Trump had already left for the summit with North Korea in Singapore — was not only offensive to Trump, but pathetic. He had his chance and he lost it.
Trump may not be the free trader Kudlow describes him to be. But he called the G-7’s bluff, strengthening his — and America’s — bargaining position in future trade talks.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named to Forward’s 50 “most influential” Jews in 2017. He is the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.