Trump blasts Nato allies, Trudeau

US President Donald Trump with Canada's Prime Minister Justin Trudeau at the G-7 summit in Quebec, Canada, last Friday. After leaving the summit early, Mr Trump shot off a series of tweets blasting the US' Nato allies, the European Union and Mr Trude
US President Donald Trump with Canada's Prime Minister Justin Trudeau at the G-7 summit in Quebec, Canada, last Friday. After leaving the summit early, Mr Trump shot off a series of tweets blasting the US' Nato allies, the European Union and Mr Trudeau, saying the Canadian leader was "very dishonest and weak", among other things.PHOTO: REUTERS

Prospect of even greater protectionist US trade policy will chill finance markets

United States President Donald Trump fired off a volley of tweets yesterday venting his anger on Nato allies, the European Union and Canadian Prime Minister Justin Trudeau in the wake of a divisive G-7 meeting over the weekend.

The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Mr Trump's efforts to make history in nuclear talks in Singapore today with Mr Kim Jong Un of North Korea, one of the US' bitterest foes.

Having left the Group of Seven summit in Canada early, Mr Trump's announcement that he was backing out of the joint communique torpedoed what appeared to be a fragile consensus on the trade dispute between Washington and its top allies.

"Fair trade is now to be called fool trade if it is not reciprocal," said Mr Trump, who flew from Canada to Singapore on Sunday to prepare for the first-ever summit between a US chief and North Korean leader.

"Sorry, we cannot let our friends, or enemies, take advantage of us on trade anymore. We must put the American worker first!"

The communique, which appeared to have papered over the cracks that surfaced at the G-7, said the leaders of the US, Canada, Britain, France, Italy, Germany and Japan were agreed on the need for "free, fair, and mutually beneficial trade" and the importance of fighting protectionism.

U.S. PRESIDENT DONALD TRUMP IN HIS TWEETS

Fair trade is now to be called fool trade if it is not reciprocal.

Sorry, we cannot let our friends, or enemies, take advantage of us on trade anymore. We must put the American worker first!

The US pays close to the entire cost of Nato - protecting many of these same countries that rip us off on trade (they pay only a fraction of the cost - and laugh!). The European Union had a $151 billion surplus - should pay much more for military!

"We strive to reduce tariff barriers, non-tariff barriers and subsidies," it said, which came despite the US' appearing intent on taking more punitive steps on trade.

Mr Trump's extraordinary outburst appeared aimed at striking a chord with voters who support his "America First" agenda. But at the same time, it put him in the position of going into a crucial summit at odds with countries he needs on his side to pressure North Korea to move towards dismantling a nuclear arsenal that threatens the US.

"Not fair to the people of America! $800 billion trade deficit," he said. "Why should I, as president of the United State(s), allow countries to continue to make massive trade surpluses, as they have for decades, while our farmers, workers & taxpayers have such a big and unfair price to pay?"

It was left to his aides to figure out how to defend his airing of grievances against trading partners instead of focusing on his coming talks with Mr Kim, which Mr Trump's supporters hope will give him a major foreign policy win.

Secretary of State Mike Pompeo praised European countries for helping to bring about the US-North Korea summit, alluding to their enforcement of sanctions against Pyongyang.

He expressed confidence that US relations with other G-7 countries would continue to move forward, despite the weekend clash in Canada. "There are always irritants in relationships," Mr Pompeo told reporters. He dismissed as "ludicrous" the notion that Mr Kim would decide he could not trust the US because of the G-7 dispute.

"He's rattling the cages right now on trade," said White House spokesman Raj Shah, who insisted there was no reason to believe there would be any negative fallout for the North Korea summit. "These are really unrelated baskets of issues."

Asked whether allies had any reason to worry about Mr Trump's commitment to any deal he reaches with North Korea following his abrupt withdrawal from the G-7 communique, one US official dismissed the issue, saying other countries have gotten used to the sometimes abrasive way the US President operates internationally.

But another US official, speaking on condition of anonymity, acknowledged: "The timing for all this is not very good at all."

The prospect of Mr Trump moving towards an even greater protectionist trade policy is likely to chill financial markets worried about tit-for-tat escalation that could lead to a full-blown global trade war.

"Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," said Mr Tai Hui, JP Morgan Asset Management chief market strategist for Asia Pacific. "This could cast a long shadow over global growth, which has rebounded in recent weeks after a soft start to the year." Nevertheless, markets were relatively calm yesterday after an early wobble.

Mr Trump also lambasted fellow members of the North Atlantic Treaty Organisation (Nato) for paying disproportionately less than the US to maintain the Western alliance.

"The US pays close to the entire cost of Nato - protecting many of these same countries that rip us off on trade (they pay only a fraction of the cost - and laugh!)," he tweeted. "The European Union had a $151 billion surplus - should pay much more for military!" "Germany pays 1 percent (slowly) of GDP towards NATO, while we pay 4 percent of a much larger GDP. Does anybody believe that makes sense?"

"We protect Europe (which is good) at great financial loss, and then get unfairly clobbered on trade. Change is coming!"

By ordering his representatives to back out of the communique, Mr Trump appeared to be asserting his oft-stated aim of upsetting the status quo, whether by pulling out of the global climate accord or the international nuclear deal with Iran or threats to scrap the 1994 North American Free Trade Agreement between the US, Canada and Mexico.

Yesterday, Mr Trump also renewed his attacks on Canada's Prime Minister Trudeau, who had hosted the G-7 meeting in Quebec.

"Justin acts hurt when called out!" he said in his latest tweet, after calling the Canadian Prime Minister "very dishonest and weak".

White House economic adviser Larry Kudlow had accused Mr Trudeau of betraying Mr Trump with "polarising" statements on trade policy that risked making the US leader look weak ahead of the historic summit with Mr Kim.

"(Trudeau) really kind of stabbed us in the back," Mr Kudlow, the director of the National Economic Council who was with Mr Trump in Canada, said on CNN's State of the Union talk show. Trade adviser Peter Navarro told Fox News Sunday that "there is a special place in hell for any leader that engages in bad faith diplomacy" with Mr Trump.

Mr Trudeau, in Quebec City for bilateral meetings with non-G-7 leaders after the summit, did not comment as he arrived yesterday.

But he got direct personal support from some European leaders.

British Prime Minister Theresa May "is fully supportive" of Mr Trudeau and his leadership, a senior UK government source said, while European Council president Donald Tusk tweeted: "There is a special place in heaven for @JustinTrudeau."

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 12, 2018, with the headline 'Trump blasts Nato allies, Trudeau'. Print Edition | Subscribe