Why President Trump Is Standing Up To Allies On Trade

By Peter Navarro

President Trump arrived at the Group of 7 summit meeting in Canada on Friday amid an expression of “concern and disappointment” from the six other nations’ finance ministers over United States trade policies. Conspicuously absent has been any acknowledgment by these ministers of the trade practices that contribute to America’s more than $500 billion annual global trade deficit in goods and services.

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Consider Germany, with which the United States had a trade deficit in goods of about $64 billion in 2017. While the United States tariff on cars made in Germany and elsewhere in the European Union is 2.5 percent, the European Union tariff is four times as high, at 10 percent. No wonder Germany sells us three cars for every one we export to Germany.

Even when Germany’s automakers build facilities in the United States, these so-called factories are more like assembly plants. S.U.V.s in the BMW X series that are assembled in the United States actually contain only 25 percent to 35 percent American-built content — the high-value engines and transmissions are manufactured in Germany and Austria.

Even as Germany runs huge trade surpluses with the United States, it is not on track to meet its financial commitment to the NATO alliance, to spend at least 2 percent of its gross domestic product on defense by 2024. Despite being Europe’s wealthiest country, Germany spends a mere 1.24 percent of its G.D.P. on defense.

America’s trade deficit in goods with Japan is higher than with Germany: $70 billion in 2017. For every one car America exports to Japan, Japan sends us over 100. High non-tariff barriers, including a complex regulatory system, make it difficult to sell American cars in Japan. Meanwhile, Japan slaps tariffs on a wide range of American agricultural products — as much as 32 percent on oranges, 50 percent on beef, 40 percent on various cheeses and 58 percent on wine.

As for Canada, which has been most strident in its criticism of the United States, it has for decades dumped its lumber into the United States, threatening lumber industry jobs in Alaska, Oregon and other states. It erects high non-tariff barriers that harm our wheat and barley growers and place United States beer and spirits exporters at a disadvantage. Wisconsin dairy farmers know all too well that Canada unfairly manipulates its dairy prices to protect its dairy farmers, hurting United States dairy exports to Canada and other markets around the world.

It’s time for our major trading partners — from strategic competitors like China to key members of the Group of 7 — to realize that the era of American complacency in the international marketplace is over. Going forward, President Trump will pursue two goals on behalf of the American nation and people.

First, trade must be not only free but also fair and reciprocal. American tariffs are among the lowest in the world. Our generosity and free market good will has only led to a huge trade deficit and the transfer of wealth abroad.

Second, President Trump reserves the right to defend those industries critical to our own national security. To do this, the United States has imposed tariffs on aluminum and steel imports. While critics may question how these metal tariffs can be imposed in the name of national security on allies and neighbors like Canada, they miss the fundamental point: These tariffs are not aimed at any one country. They are a defensive measure to ensure the domestic viability of two of the most important industries necessary for United States military and civilian production at times of crisis so that the United States can defend itself as well as its allies.

Neither of these goals of the Trump presidency should stand in the way of our longstanding and productive strategic alliances and economic relationships with members of the Group of 7. There will continue to be a strong need to cooperate on issues of mutual interest, including defending democracy and freedom against authoritarianism, and protecting our citizens from terrorism. This also means we should find common ground on fair and reciprocal trade in ways that favor market economics, lower trade barriers and are mutually beneficial to workers across the Group of 7 nations.

President Trump welcomes continuing dialogue and cooperation with Group of 7 members and our other allies and trading partners. But the days of accepting unfair trade practices are over.

Peter Navarro is Assistant to the President for trade and manufacturing policy. This op-ed appeared in The New York Times on June 8, 2018.

Shared from Whitehouse.gov

RELATED: President Trump: Tariffs A Matter Of National Security

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James Edwin Horn
2 years ago

G7, 2018 and a Real President
By James E. Horn

President Trump is in Canada where the other six members of the Group of Seven are prepared to assault President Trump and his position on tariffs. They will fail.

The United States of America is on track to soon achieve 21-trillion dollars of debt. How did we get here? We have done several things to reach this point. We gave the whole store away.

I was stationed at the American embassy in Brussels Belgium in the early 1970’s when the European Union was getting rolling. I worked in the classified communications center where literally tons of messages were going back and forth between the American Embassy, the U.S. Mission to the EU, and dozens of agencies in Washington. I read many of them. Two major activities were underway. One was the Law of the Sea negotiations which I won’t go into here. The second was the General Agreement on Trade and Tariffs (GATT), which commenced in the late 1960’s, where our “negotiators” with the backing of hundreds of Washington bureaucrats gave the store away by agreeing to let the Europeans set higher tariffs on American goods. The Europeans prospered and America suffered and still suffer the consequences of those dumb giveaways.

By 1972, the Europeans were highly critical of America because of our awful balance of payments (BALPA) – which were a result of those GATT agreements. Treasury Secretary John Connally was authorized by the Congress to announce to the International Monetary fund on May 6, 1972 that the USA would devalue our currency by 8% (by raising the price of our gold) which took pressure off of the balance of payments. The Europeans howled about this – about our taking action regarding those very trade imbalances. Go figure.

We have been borrowing money ever since because we were still stuck behind the eight-ball paying higher tariffs on American exports while they enjoyed lower tariffs so that they could sell their products here on the relative cheap and charge us higher taxes on our exports. American businesses and workers were getting screwed regularly and our economy was slowly degraded while they flourished – at the expense of America.

This same pattern has been repeated with our Pacific/Asian and Latin American trading partners. America – American workers, businesses, and taxpayers have been taking it on the chin for about fifty years and no President has had the gumption or brain power to do anything about it except to whine.

President Trump has the courage and the brains to do more than whine. He is calling them out and is taking action to compel our trading partners to reciprocate by lowering their tariffs to a par with ours. Now, they are whining and bitching loudly about President Trump’s quest for an even playing field. If they won’t lower their unfair and irresponsible tariffs, President Trump will reciprocate by raising ours to be on a par with their tariffs. One glaring example of this terrible situation is Canada’s 270% tax on American dairy products. Another example is to look at all of the Asian and European cars on our roads. You won’t see a commensurate number of American cars on their roads. Japan charges about 900% for American rice. China’s taxes on American goods are outrageous. One can go on and on.

America has fought wars all over the globe to protect and defend others, and in most cases, we did not receive a dime in payment for the lives lost or squandered, ruined, and the huge amounts of national treasure involved in protecting so many others, some not worthy of what we did for them.

President Trump is truly taking the giant steps necessary to raise America up to be on a par with our trading partners. President Trump is the best thing to happen to America since we broke away from the British King.

Gerhard
Gerhard
2 years ago

Thank you Mr. James Horn… you went right to the point and opened the eyes and minds of many, including mines !! Now we have a ” President for the people by the people ” and it is a shame that still so many don’t want to realize it , especially our Representatives in both Chambers. We all should be united and fight for this great country of ours, and just to let the readers know, I am an immigrant that came in 1957, served in the US Air Force, raised my 3 children, paid all my takes and now am retired; the difference with so many : I came through the “front door”, not jumping the fence !! The Lord bless and continue to protect our President and this great country of ours. Shalom

Warren
Warren
2 years ago

The Days of beingtaken advantage of are Over..!!! What a difference a Patriot President Makes..!!
rather than a Muslim Fraud and Banker Puppets…!!! We have only had Two Presidents since they got away with the Murder of Jack Ronald Regan (They tried only two months in with that mind altered Kid) and now Donald Trump. John Fitzgerald Kennedy was The Greatest and Last Democrat. The Democrat Party Died November 22nd 1963 with the CIA AND SECRET SERVICE’S DIRTY DEED…!!! Included LBJ who Ducked before the Shots and HW Bush 41 who Ran the CIA Team in Dealey Plaza…!!! Oswald was telling the Truth when he said he was a Patsy he never fired a Shot in the Plaza…!!!

Bay0Wulf
Bay0Wulf
2 years ago

The reason for these tariffs … the disparity between our tariffs policy and our “friends’” tariff policy need to find its way into the public eye.
Maybe it should be brought up regularly by Sarah in future White House Communications.
Perhaps the White House should start all future Press Releases with a 5 or 10 minute “history lesson” focused on how we got to where we are … not simply to blame previous inept politicians and administrations … but to highlight how Our Good Intentions have been turned around and used against Us.
My other suggestion has been from the beginning that President Trump should consider bringing back the “Fireside Chats” … or whatever today’s equivalent of that is … where he calmly, quietly and rationally can tell people, without interference by the press, the things he or the administration think it would be good &/or helpful for the US Citizenry to know.

zee
zee
2 years ago

MSM NEWS Is Failing to state, and/or Altering (buzz) 6 + 1 re G 7.
Absolutely Bring back Russia to G8. Period.
Ludicrous to not Do So. POTUS Knows/ &
Will Do. Thank you.

Bill Cash
2 years ago

I believe President Trump will stick to his guns on this. Most of the American people don’t know what is at stake here. These nations that have stuck it to us for so long have literally taken food from the mouths of some of our people especially the elderly and under privileged . There is so much we could do for our people if we stopped allowing this siphoning off our future. Look at the money the U N is costing the USA. The USA actually would own the U N if business ethics were applied to the arrangement. It’s time to stand up and put our tax dollars where they benefit the US. So if these other nations refuse to offer a level playing field then so be it, ally or not. This president is prepared to do business as business demands and we should be behind it.

Craig Travers
Craig Travers
2 years ago

I live in Canada and I agree with you.

Douglas Kelly
Douglas Kelly
2 years ago

‘Japan slaps tariffs on a wide range of American agricultural products — as much . . . 50 percent on beef, . . . ”
No wonder a steak dinner for two in Tokyo costs as much as a typical house payment.
This only hurts their own people, so it’s hard to understand why this thing is sustained. To spite the US?