Beginning of a Tectonic Shift on Trade?

Beginning of a Tectonic Shift on Trade?

The first is increased pushback from our friends and allies, particularly against the steel and aluminum tariffs and, prospectively, against the likely automobile tariffs. The G7 meeting in Quebec suggests that an attitude adjustment is underway. The Europeans in particular, along with the Canadians, seem to be moving away from a strategy of flattery and appeasement and toward one of more direct confrontation and measured retaliation. They were stung not only by the tariffs themselves, and their expected impact on their companies and workers, but also by the national security rationale that the United States used to justify them. While they would not entirely reject the theory that both commodities are relevant to a nation's security, the idea that countries that are formal allies and have a long history of standing together against common security threats have suddenly become “threats” is, as Canadian prime minister Justin Trudeau put it, “insulting.” Despite the children's chant about sticks and stones, words do make a difference; they do hurt; and they appear to have done so in this case. The fact that the president regularly undercuts his own argument by linking the action to other matters, like Canada's dairy program or EU auto tariffs, dramatizes the hypocrisy of the U.S. position and only makes matters worse.

 

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