Today and tomorrow Trump administration officials will start a series of meetings at the Group of Seven (G7) Summit in Canada.
The Trump Administration and G-7 leaders have an opportunity to reaffirm their commitment to global free trade. The historic 1983 Williamsburg Economic Summit Conference Declaration on Economic Recovery should serve as a model: “We commit ourselves to halt protectionism, and as recovery proceeds to reverse it by dismantling trade barriers. We intend to consult within appropriate existing fora on ways to implement and monitor this commitment. We shall give impetus to resolving current trade problems.” World leaders including Ronald Reagan, Margaret Thatcher, Pierre Trudeau, Francois Mitterrand, Yasuhiro Nakasone, and Helmut Kohl committed to this vision for mutual prosperity.
President Reagan later observed, "At all eight of the economic summits I attended, I tried to preach the virtues of free trade."
Unfortunately for Americans, President Trump appears to be basing his trade policies on Herbert Hoover instead of Ronald Reagan. Nowhere is this more apparent than in President Trump’s recent move to impose steel and aluminum taxes in imports from U.S. allies. Many countries, including Canada, Mexico and France, have already signaled they would impose retaliatory taxes on American goods and services exported to their countries.
This development would be unfortunate for the millions of American workers -- retailers, manufacturers, auto suppliers, energy pipeline workers, and literally anyone who works with heavy construction equipment -- who relies on steel and aluminum to drive their business. Even American beer manufacturers, whose 2 million workers depend on lower priced metals for their industry, would find their commercial activity in jeopardy because of the tariffs. For evidence of expected job losses, in 2002 when the Bush administration levied tariffs on steel imports, it is estimated that the tariffs caused nearly 200,000 job losses and cost roughly $4 billion in lost wages before they were withdrawn in 2003. More workers lost their jobs in downstream industries than the entire domestic steel industry had at the time.
Similarly the Trump administration can use the G7 Summit as an opportunity to reverse course on its currently stalled efforts to renegotiate the North American Free Trade Agreement (NAFTA). U.S. negotiators could have easily secured a deal by now had they not focused on issues like inserting a 5-year self-destruct clause into NAFTA, making it easier for Canadian and Mexican officials to confiscate Americans’ property by weakening the agreement’s Investor State Dispute Settlement (ISDS) mechanism, and a host of other issues.
Today, 41 million jobs in the U.S. depend on trade; 14 million American jobs are supported by trade with Canada and Mexico. America’s GDP is up $80 billion as a result of NAFTA. And over 125,000 small and medium-size businesses export goods and services to our NAFTA partners. In short, NAFTA has been a win-win-win for Americans.
President Trump can uphold an America First trade agenda by withdrawing job-destroying steel and aluminum tariffs and taking the NAFTA renegotiation in a constructive direction -- one that grows America’s economy and provides critical investor protections for American businesses.
Last year, all G-7 countries agreed: “we reiterate our commitment to keep our markets open and to fight protectionism, while standing firm against all unfair trade practices.” At a minimum, they should stick to this commitment at this weekend’s summit. The other G-7 leaders will do President Trump and Americans a great service if they give him some good advice to counter the self-destructive advice he seems to be getting from his own trade advisors.