Logo
11th-Jun-2018

Trump exits G-7 but understands Canada is not a soft target

By

DONALD Trump ensured he left the G7 summit in a state of chaos by announcing from Air Force One on Saturday night that the US had withdrawn its endorsement of a joint communiqué and launching a blistering attack on his host, Justin Trudeau, the Canadian prime minister. Mr Trump described Mr Trudeau as dishonest and weak as he accused Canada of trying to take advantage of US interests by imposing a 270 percent tariff on milk, as per news reports.
He was already on his way to Singapore for next week's summit with Kim Jong Un when he fired off two tweets unravelling the progress made during the previous 24 hours. It mirrored the build-up to talks which were thrown into disarray by his appeal for Russia to be re-admitted to the G7 and promised not to back down on tariffs.
The main reason for all this seems to be milk. Trump has attacked Canada's protected dairy industry before, calling it a "disgrace" and blaming it for widespread hardship among US farmers. Although the entire trade in dairy products between the two countries is worthless than US$600m, ideological division has sharpened the ongoing dispute. His negotiators have demanded the dismantlement of Canada's openly dirigiste system of supply management in agriculture - a complicated nexus of production quotas and import tariffs designed to ensure Canadian dairy, egg and poultry farmers receive fair prices for their products.
But is he right? Trade data flatly contradicts the claim that Canadian supply management is ravaging US dairyland - either because it unfairly restricts imports or because it dumps a subsidized surplus in US markets.
Trumps accusation that Canada is ripping off US farmers is flatly contradicted by the ground reality as US farmers have no bone of contention with Canada. On the contrary, all they want is a system like the Canadian system of supply management to be established in the US so they don't have to sell milk at prices below their cost of production. But instead of listening to the ground reality all Trump wants to do is to be a big bully and pick fights with his neighbours and try to establish warm relations with the natural enemy of the West--Russia.
This is no way to treat a country which takes in more US exports than any other. It will only harm US consumers and US businesses in the long run. It is time that Trump learns that Canada is not a soft target.