How the G-6 Can (Discreetly) Get Trump to Back Down

(The Bloomberg View) -- Never before has a U.S. president worked so hard to isolate his country from its friends. The G-7 summit of advanced economies that starts today in Quebec sees Canada, France, Germany, Italy, Japan and the U.K. united in opposition to Donald Trump’s protectionist trade policy. The problem goes deeper than a first round of tariffs and counter-tariffs, because Trump’s trade policy is not an oversight: Taken at his word, the president is opposed to multilateralism in principle.

He’s wrong, of course. The cooperative global order shaped by previous U.S. presidents has served American interests far better than Trumpian unilateralism ever could or will. Needless trade friction will distract the summit’s attention from cooperation on North Korea, Russia, China, migration, stresses in emerging markets, and more.

Future presidents, one hopes, will understand this. Right now, the question is how to cope with a president who just doesn’t get it.

The G-6 needs to judge its response cautiously. Too public a dressing down of the president would probably backfire — not just because Trump is unlikely to respond well, but more especially because it wouldn’t cause his supporters to think again about backing his policy.

The same goes for excessive trade retaliation. Small, measured counter-tariffs — of the kind already promised — are a political necessity for Europe and the other targets of Trump’s moves, because those governments can’t afford to be seen as capitulating. But going beyond those mild responses and deliberately escalating the fight is unlikely to work.  

In public, the six governments (together with the EU) should make it as easy as possible for Trump to back down. In private, though, they should increase the pressure on him to do so by showing they will act in a coordinated way, both in designing their responses to this first phase of protection and in replying to any subsequent measures. Trump proposes to divide and conquer — a strategy once reserved for enemies. The G-6 should refuse to be divided.

Another thing to bear in mind: Time is on the side of the G-6. Opposition to Trump’s tariffs from U.S. business and consumers is likely to mount as their effects become clear. If Trump persists, taxes on trade will push up prices for U.S. consumers and disrupt the operations of the country’s internationally integrated companies; they’ll slow the economic expansion and the growth of aggregate employment; firms will contract and workers will lose their jobs.

The best hope for smarter policies from the White House is that more Americans begin to see this, demand change, and press that view on a Congress that has been too reluctant to act.

©2018 Bloomberg L.P.

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