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G-7 Summit Rancor Descends to ‘A Special Place in Hell’
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Over the weekend, the remnants of the U.S.-led international (industrialized leading nations) alliance crumbled to dust at this year's annual G-7 summit. Canadian Prime Minister Justin Trudeau hosted the important yearly meeting that quickly descended from bad to worse after President Trump left early for his ground-breaking summit in Singapore with the North Korean tyrant Kim John Um.
A series of press conferences turned sour in Canada degenerated into a tirade of angry tweets and counter tweets from Trump and his administration. By the time the dust had settled, the President had disavowed the G-7 joint statement completely.
This horrible scene may quickly be forgotten in the wake of the Singapore conference with the North Korean menace, but it will have long-lasting repercussions for the global economy and the international trade war that is already beginning. The U.S. versus Canada and Mexico is likely to play out alongside the main battle of the U.S. against the EU. You must protect your retirement portfolio with IRA-approved gold quickly. The multi-thousand year track record of the yellow metal explains why gold makes sense in an IRA.
Rhetoric Between the U.S. and Canada Turns Nasty Immediately Following the Summit
Shortly after President Trump departed from Quebec and the G-7 Summit, the Canadian prime minister held his own press conference where he lambasted the U.S. for its new trade-tariff policy and “America first” positions. President Trump has not stopped lashing back at Trudeau in the 48 hours since then. This culminated with Trump and his team refusing to endorse the G-7 declaration that calls for a decrease in any barriers to trade such as tariffs.
President Trump obviously felt betrayed by the way that the Canadian prime minister smiled and acted like things were fine at the summit before quickly turning against his neighbor in a subsequent domestic audience directed press conference. Trump called Trudeau “very dishonest and weak” in exchange for the Canadian comments that insisted the American tariffs were “kind of insulting.”
If only it had stopped with that. Larry Kudlow the White House Economic Adviser then jumped in angrily by accusing the Canadians of resorting to “polarizing” statements against the trade policy of the U.S. He did one better by declaring Trudeau had “stabbed us in the back.”
By Sunday, the President's Trade Adviser Peter Navarro had outdone Kudlow with his incendiary remarks on the results of the G-7 Summit with:
“There's a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door. And that's what bad faith Justin Trudea did with that stunt press conference. That's what weak, dishonest Justin Trudeau did, and that comes right from Air Force One. He [Trump] did him a favor. And he was even willing to sign that socialist communique, and what did Trudeau do as soon as the plane took off from Canadian airspace? Trudeau stuck our President in the back.”
Canada promised to response to tariffs on their goods by erecting retaliatory tariffs against the U.S. Trudeau stated:
Canada will not be “pushed around. I will always protect Canadian workers and Canadian interests.”
By Sunday afternoon, Larry Kudlow had escalated things still further on CNN's “State of the Union” news program in condemning the comments of Trudeau as those of a “betrayal.” Meanwhile, the Canadian Foreign Minister Freeland weighed in on the American tariffs by declaring:
“The national security pretext is absurd and frankly insulting to Canadians, the closest and strongest ally the United States has had. We can't pose a security threat to the United States, and I know that Americans understand that. So, that is where the insult lies.”
Fair Trade Equals ‘Fool Trade' Now
Trump came up with a new catch phrase “fool trade” to describe unfair trade while en route to Singapore. He questioned the value of the trading relationships between the United States and its very closest allies with the statement:
“Fair trade is now to be called Fool Trade if it is not reciprocal. According to a Canada release, they make almost 100 billion dollars in trade with U.S. (guess they were bragging and got caught!). Minimum is 17 billion. Tax dairy from us at 270 percent. Then Justin acts hurt when called out!”
There is confusion on what the trade imbalance between the U.S. and Canada actually amounts to these days. If you only count goods (and not services) as per the USTR, the U.S. did record a $17.5 billion trade deficit with Canada in 2017. Canadian data makes it worse by claiming that the goods-only deficit is $126.74 billion Canadian dollars, or $97.75 billion.
This is how President Trump arrived at the nearly $100 billion figure he accused Canada of pocketing at the expense of the U.S. over the weekend. President Trump then broadened his attack on Canada to indict the rest of the world with:
“Why should I, as President of the United States, allow countries to continue to make massive trade surpluses, as they have for decades, while our farmers, workers, and taxpayers have such a big and unfair price to pay? Not fair to the PEOPLE of America! $800 billion trade deficit… Sorry, we cannot let our friends, or enemies, take advantage of us on trade anymore. We must put the American worker first!”
This chart shows the monthly difference between imports and exports in the United States, backing up the President's point:
With this series of remarks, the President had ended the unforgettable 2018 G-7 Summit by coming full circle back to the position of erecting tariff barriers to fix the trade balance between the U.S. and the rest of the world. Unfortunately for the U.S.-led Western alliance, it did not leave any well-wishers standing around the American table or supporting the United States' trade position.
NATO Spending Further Rankles Trump
President Trump was also angry with Germany and France, though he did not call them out by name. Instead, he took issue with the so-called freeloaders of Europe (i.e. Germany and France especially) who consistently pay less than their minimum fair contribution of GDP's to NATO for their own defense against the likes of Russia.
Trump vented his frustration that the United States is consistently responsible for the majority of the expense entailed with the trans-Atlantic military alliance known as the North Atlantic Treaty Organization. Trump decried the injustice of it all with:
“And add to that the fact that the U.S. 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!”
Hopefully these remarks will fade into the annals of history as quickly as possible, but the day is coming soon when the U.S. needs its very critical long-time allies it has just thrown under the proverbial bus. On that day, the nations of Germany, France, and Canada (among others) will stand quietly by and not offer to help or support the U.S. position any longer. Analysts long have opined that the one thing that was preventing China from eclipsing the U.S. on the world stage was the backing alliance of the supporting Western countries it leads that help to cement and ensure its global position of dominance.
The nation-dominoes in that supporting crucial lineup are already falling by the wayside in no small part thanks to the latest results of the disastrous G-7 Summit this past weekend. You can not save the United States' crumbling global alliance, but you can look out for your own portfolio by acquiring IRA-approved precious metals. Now you can keep your portfolio insurance in top offshore locations for storing your IRA gold. It's time to think serious about the gold IRA rollover rules and regulations before things in the geopolitical sphere get any more out of hand than they already are.