Donald Trump made an immediate impact at this weekend’s G20 conference in Germany as he overturned the U.S.’s 73-year-old role as the leading voice in support of globalization and free trade.
Finance ministers from countries including China, Australia, Germany and France “caved into pressure” and agreed to a revision in the world trade policy that “experts warned could make it easier for countries to erect damaging tariffs,” according to the Australian Finance Review.
That revision saw decade-old references for G20 nations to “resist all forms of protectionism” erased in a “watered-down” communique presented after negotiations in Baden-Baden. Experts warned that this move would “give Mr. Trump more space…to impose tariffs or border taxes against trading partners.”
Yet, this is unlikely to have come as a surprise that President Trump and new U.S. Treasury Secretary, Steven Mnuchin, took this stance at the first G20 conference held since Trump took office. After all, Trump’s “America First” protectionist policy was a significant keystone in his successful election campaign last year.
Protectionism, the policy of introducing tariffs and taxes on imports and thus “protecting” the interests of domestic industries, has been a part of the U.S.’s trade policies since the nation’s earliest days. The very first Secretary of the U.S. Treasury, Alexander Hamilton, argued in 1790 that “America should impose tariffs to protect its ‘infant industries“.'”
And while we may have gotten used to the U.S. being one of the most vocal proponents of globalization since World War II, President Trump has signaled desire to return to more traditionally American protectionist policies since he took office in January 2017.
It is the willingness of other G20 countries to agree to the revision that is perhaps more surprising. While President Trump is attempting to refocus jobs and manufacturing towards his own citizens through the “America First” policy, other nations have grown to rely on a global, free-trading world.
Of the G20 nations present, several countries, including Germany and China, have economies that have a strong reliance on international free trade and exports. In fact, “roughly 45 percent of [Germany’s] gross domestic product” comes from exports. More widely, economists have stated that this move by President Trump is a “setback for the G20 process and poses a risk for growth of export-driven economies,” according to Reuters News Agency.
The other major topic at this G20 meeting in Germany was climate change. Again, U.S. representatives presented a perspective consistent with President Trump’s own recent comments and actions.
At the G20 meeting, the U.S. “refused to renew a pledge on combatting climate change“, a move that French finance minister Michael Sapin “regretted,” according to Fortune magazine.
That pledge had been made by world leaders at the previous G20 conference, which took place before President Trump’s inauguration. The conference in Hangzhou, China, had seen G20 nations pledge “strong and effective support and actions to climate change.” This had been a pledge strongly supported by President Trump’s predecessor, former U.S. president Barack Obama.
Following the recent U.S. budget, in which environmental funding was significantly cut, negotiators had sought a reassurance in a renewal of this previous pledge. However, the U.S. Treasury Secretary was quoted as saying environmental issues were “not in my track.” He later commented further on the issue, making a somewhat vague and non-committal statement.
“President Trump is looking at the Paris treaty [on climate change] and other treaties and the administration will have views on that as they consider their policies.”
And so we may have to wait until the first G20 meeting of leaders, rather than this one of finance ministers, to gain more clarity over the long-term international policy on climate change.
Whether Donald Trump will follow through with his promise to withdraw from the Paris treaty will no doubt be a significant focus of that G20 event, scheduled to take place in Hamburg, Germany on July 7-8.
[Featured Image by Justin Sullivan/Getty Images]