|Is He a Simpleton or Something Worse?||
8 June 2018
Cogito Ergo Non Serviam
As he departed Washington for the G-7 Summit in Quebec, President Donald Trump said, "I have been Russia's worst nightmare [worse than Hitler?] . . . . But with that being said, Russia should be in this meeting. You know, whether you like it or not, and it may not be politically correct, but we have a world to run and the G7, which used to be the G8, they threw Russia out, they can let Russia come back in, because we should have Russia at the negotiating table." The G-7 represents the largest economies in the West. China, India, Brazil and South Korea all have larger economies than Russia, which might belong in the G-12. Once again, Mr. Trump is being excessively nice to Russia, and it's painfully obvious he needs or wants something from Mr. Putin.
Being nice to an aggressive and dictatorial Russia is bad enough. Picking fights with allies at the same time, as Mr. Trump has done, is foolish in the extreme. He has put a 25% tariff on steel imports and a 10% tariff on aluminum imports. This hurts America's trading partners in Europe and Canada.
The idiocy of the Trump move is shown best in relation to the tariffs on Canadian goods. The White House claims it is doing this in the name of national security. When Canadian Prime Minister Justin Trudeau confronted him on this nonsense, Mr. Trump snarkily (and incorrectly) said that Canadians once burned down the White House. The building burned in the War of 1812 when sappers and miners from the Royal Corps of Engineers were let loose on it. While Canada was part of the British Empire then, the sappers and miners were largely from Wales and Cornwall. Be that as it may, the thought that Canada represents any kind of threat the American national security is laughable because Canadian national security is so closely tied to it.
The Washington Post observed, "Thursday evening, when tensions between Trump and French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau appeared to be boiling over, the U.S. leader vowed to impose new tariffs and other economic penalties against Canada and the European Union if they did not allow more American imports into their countries."
Mr. Trump views international trade as a zero-sum game in which a surplus means one is winning and a deficit means one is losing. It is nothing of the sort. One wonders if Mr. Trump has ever considered that the Trump Organization runs a structural deficit with its suppliers. The contractors who build his rather tacky and vulgar buildings never send him money. He always sends it to them, or at least, part of what he owes them. One is certain he would object to being called a loser in his trading relationships with them.
It might interest Mr. Trump to know that the US had a $10 billion trade deficit with Russia last year, and the deficit through April 30 this year is $3.753 billion. Wanting to go easy on a country that has a trade surplus with the US is against his general policy. So, what is it about Russia?
This journal believes that Mr. Trump has been laundering money for the Russians as a way to keep his credit starved businesses afloat for the last couple of decades. He loathes the current sanctions against Russia because they adversely affect his access to cheap but dirty money. He was elected to beat up on foreigners with surpluses by his base, who have done poorly out of globalization (in part due to structural issues, in part due to poor policy and implementation, and in part due to their own inaction). However, Russia is the one country he cannot afford to offend.
Unfortunately for Mr. Trump, the other G7 countries remember that Russia was dropped from the meetings because of its annexation of Crimea and its occupation of eastern Ukraine. Perhaps, the Russians could come back if they left those places. That would be worth talking about.