Frustrated foreign leaders who failed to stop President Donald Trumps protectionist trade policies are trying one last-ditch negotiating tactic: a real trade war.
Canada, Mexico and the European Union have pledged to slap penalties on billions of dollars of American goods in the coming weeks on items ranging from orange juice to Harley Davidsons to aftershave.
Their moves are a tit-for-tat response to Trumps own decision to impose steep duties on those countries steel and aluminum exports, and they show just how deeply the presidents combative stance has altered global alliances built over decades. Foreign leaders are hoping a slowdown in the U.S. economy and loss of American jobs will persuade Trump to change his mind.
“I think theres a resignation,” said Tony Fratto, a former Treasury Department and White House official under George W. Bush. “Youre not going to do it with words, so you have to do it with impact.”
Until now, most leaders have tried to play nice and charm the unpredictable U.S. president into softening his policies.
Japanese Prime Minister Shinzo Abe traveled to Trump Tower to visit the president-elect shortly after his election, only to have Trump withdraw from the Trans-Pacific Partnership on his third day in office a couple of months later. Canadian Prime Minister Justin Trudeau has sat patiently through several rounds of talks to renegotiate NAFTA, only to see Trump repeatedly threaten to tear up the agreement if Ottawa doesnt agree to what it sees as unreasonable demands.
And French President Emmanuel Macron has fashioned himself as Trump “interpreter” in Europe, where he and other members of the EU have repeatedly threatened to hit back at U.S. tariffs with retaliatory duties of their own — only to see the U.S. president slap steep penalties on their steel and aluminum exports anyway.
Now those leaders are punching back.
“We can show the U.S. president that his actions, unacceptable actions, are hurting his own citizens,” Trudeau told reporters this week. “American jobs are on the line because of his actions and because of his administration. And when we can underscore this — and we see that theres a lot of pressure within the United States — then perhaps he will revise or review his statements.”
After Trump had left the G-7 summit in Quebec on Saturday, Trudeau rebuked Trumps trade policies at a press conference, saying, “Canadians, were polite, were reasonable, but we also will not be pushed around.”
That resulted in the president abruptly reversing his decision to sign a joint communique between the seven nations and accusing the Canadian leader of making “false statements.”
Foreign leaders have been forced to navigate a U.S. administration that is “disorganized and undisciplined,” as one foreign government trade official put it.
Foreign officials told POLITICO they initially chalked up much of the disarray to inexperience and a misunderstanding about how relationships with U.S. allies work for the first several months of the administration. But the chaos has continued well into Trumps second year in office — and has been compounded by an internal divide among Trumps own top economic advisers.
And that meant that the proposed penalties on Canada, Mexico and the EU came as a near-complete surprise — to those countries as well as to U.S. lawmakers, even those from the presidents own party.
Still, the allies wasted little time in unleashing retaliatory plans. Trudeau, for one, spent months being what he has described as “polite and respectful” toward Trump despite stark differences in their politics. Now he has become one of the loudest critics of the new steel and aluminum tariffs, calling them “insulting and unacceptable,” and has vowed to respond with penalties on more than $12 billion in U.S. goods.
In Europe, Brussels responded to the tariffs by moving forward with its own retaliatory duties on more than $3 billion in U.S. goods, even as EU member nations have been somewhat divided over just how strongly to lash out against Trump.
Macrons administration in France has emerged as perhaps the most forthright in emphasizing the need to retaliate, in part because of a belief that the U.S. president respects strength.
“We do not want the situation to escalate to a full-blown and merciless trade war, but hostile actions cannot be left unanswered,” French Finance Minister Bruno Le Maire said this week. “The EU is now determined to assert its economic sovereignty.”
Germany has been more circumspect amid concerns that Trump might move forward with a second round of tariffs on automotive imports that would deal a major blow to the countrys domestic car industry.
Mexico, too, has so far taken a softer approach to the tariffs — at least in terms of messaging. The government is moving to impose retaliatory duties on roughly $3 billion in U.S. goods like pork, cheese and lamps that will take effect next month. But two sources close to the government said the country isnt looking to cut or strain ties with the U.S. regardless of any rhetoric out of the Trump administration because “we need to be able to play well in the sandbox,” as one put it.
“Mexico has no incentive to get into brawls with the U.S., because governments change,” the other source said. “Peña Nieto is going to be gone, Trump will also be gone, and the relationship will move forward.”
Even as they hit back at Trumps tariffs, nations are still trying to persuade Trump to change his mind: Nearly 30 European ambassadors to the U.S. made their fact-based appeal to Trump again on Friday through a Washington Post op-ed, for example.
But they have also accepted the fact that it is time to forge ahead with punitive measures, even if doing so amounts to shooting themselves in the foot.
“Things are probably going to get worse before the United States changes its position,” Fratto said. “Because the United States doesnt think its wrong. It thinks its right, and its very indignant about it.”
Sabrina Rodriguez and Jakob Hanke contributed to this report.