Trump prefers to negotiate bilaterally; he sees an advantage to being the world’s largest economy and greatest superpower, and wants to maximize his clout by being the strong man against one — not against many.
The fault lines were pretty much established before the G7 heads of state even boarded their planes for a summit in the French coastal resort of Biarritz. There is the G5, and then there is the G2.
The G5 consists of France (G7 president this year), Germany, Italy, Canada and Japan. To this we may add the EU. They see largely eye to eye on trade wars and their harmful effect on the global economy —unsurprisingly, since Japan and Germany are the world’s export champions alongside China and the Asian dragons. They also agree on the need to address climate change and increase social equality.
EU Council President Donald Tusk put on hold a free trade agreement with the Mercosur countries, which include Brazil, until the fires in the Amazon region are extinguished and Brazil does more to protect the world’s largest rainforest.
Meanwhile France is leading efforts to tax tech companies where they generate their profits rather than in tax havens. French Finance Minister Bruno Le Maire and US Treasury Secretary Steven Mnuchin locked horns on this issue two months ago, because Washington views such a tax as an assault on mainly US companies.
Europe also fundamentally disagrees with the US over the 2015 agreement to curb Iran’s nuclear program in exchange for an easing of sanctions. Trump pulled out of the deal and reimposed US sanctions; Europe is seeking a way to rescue the agreement, but with little success so far.
The G2, on the other hand, would be the US and the UK — the Trump and Boris show. The president and Britain’s new prime minister like each other; Trump was saying Boris Johnson could lead the UK long before Theresa May’s resignation was on the agenda. The president also likes Brexit, a further illustration of his distaste for multilateral frameworks.
Johnson is at odds with the G5 on Brexit. He visited Berlin and Paris last week to urge the scrapping of the “Irish backstop,” a mechanism to avoid a hard border between Northern Ireland and the Republic if the UK and the EU cannot reach an agreement on Brexit. He repeated that Britain would leave the EU on Oct. 31, come what may, and was rebuffed by both Emmanuel Macron and German Chancellor Angela Merkel. On Saturday Tusk said in no uncertain terms that he would not be bullied by Johnson’s grandstanding.
Johnson needs to do whatever he can to please Trump, because he will be in dire need of friends and a trade agreement with the US once the UK stands alone. He is closer to the G5 on China trade wars, Iran, the digital tax and the environment — but needs must, and he will do what it takes. All in all, this will not be an easy summit, which Macron foresaw when he said not to expect a communiqué.
We have come to expect incendiary presidential tweets from Air Force One en route to summits, and this time Trump outdid himself by announcing an additional 5 percent tariff on Chinese imports. He had admittedly been provoked by Xi Jinping, who overnight on Thursday announced new tariffs on $75 billion worth of imports from the US. Trump did not stop there, and ordered US companies to stop purchasing goods from China. None of this bodes well for the resolution of their trade war.
The G7 emerged in the 1970s as a framework for the world’s leading economies to discuss issues of common concern. Its importance has been superseded by the G20 since the financial crisis in 2008, which makes sense because that framework gives weight to the emerging economies of the East and the South.
Trump may dislike multilateral frameworks, but many of the world’s issues — trade, the economy, the environment, poverty, migration — can be resolved only if countries cooperate in cool and calm deliberations, not erratic tweets. The president might do well to recall a proverb from the American Midwest: “It is honey that attracts the bees, not vinegar.”
It is a pity to see the US losing interest in a multilateral global architecture of which, more than any other country, it laid the foundations. The US was also one of the main beneficiaries of a framework that helped create prosperity and solve conflicts around the world. There is no doubt that any institution will need reform after a number of years, but reform is a far cry from destruction.