President Trump arrived at the Group of 7 summit meeting in Canada on Friday amid an expression of “concern and disappointment” from the six other nations’ finance ministers over United States trade policies.
Conspicuously absent has been any acknowledgment by these ministers of the trade practices that contribute to America’s more than $500 billion annual global trade deficit in goods and services.
Consider Germany, with which the United States had a trade deficit in goods of about $64 billion in 2017. While the United States tariff on cars made in Germany and elsewhere in the European Union is 2.5 percent, the European Union tariff is four times as high, at 10 percent. No wonder Germany sells us three cars for every one we export to Germany. Even when Germany’s automakers build facilities in the United States, these so-called factories are more like assembly plants.
S.U.V.s in the BMW X series that are assembled in the United States actually contain only 25 percent to 35 percent American-built content — the high-value engines and transmissions are manufactured in Germany and Austria. Even as Germany runs huge trade surpluses with the United States, it is not on track to meet its financial commitment to the NATO alliance, to spend at least 2 percent of its gross domestic product on defense by 2024.
NAFTA is also a similar situation but president Trump said in a News conference at the G7 Summit that he is certain a deal will come from NAFTA if not he will strike a deal one at a time with each respective country.