The G-7 should listen to Trump or go away

President Trump traveled to Quebec Friday for the annual gabfest for the Group of Seven (G-7) industrialized nations – made up of the U.S., Britain, Canada, France, Germany, Italy and Japan – after saying he wants Russia readmitted to the group, turning it into the G-8 once again.

As he departed the White House, the president also promised to press the other G-7 leaders on their unfair trade practices – even as the French and Canadian leaders planned to ambush him over tariffs.

President Trump’s instinct to change the grouping is right. It was assembled in the mid-1970s in the wake of the disastrous “Nixon Shock,” which ushered in an era of financial chaos after the U.S. ditched the gold standard. The period also marked the turning point when America switched from trade surpluses to persistent trade deficits.

The original idea of the G-7 was to gather the leaders of rich capitalist countries who had the money and shared values to tackle finance-related problems. It also helped the leaders develop personal relationships that would come in handy during crises.

But since its creation and especially today, the G-7 has been too heavy on European nations, which make up the majority. This was compounded by giving the European Union (EU) a seat, which means at this summit four leaders of European governments will be supplemented by two EU poohbahs. Russia joined the group in 1997, but was suspended after it annexed Crimea four years ago.

Today many of the G-7 members would no longer make the cut for membership. Canada’s economy is smaller than some U.S. states. Italy is experiencing perennial financial chaos. U.S. authorities see Germany’s largest bank as “troubled,” and its political establishment is on its last gasp after subjecting Europe to stagnation and uncontrolled immigration. The EU itself is on a path of slow disintegration.

Clearly, this group isn’t going to be solving any problems for us. Instead, French President Emmanuel Macron and Canada’s leftwing Prime Minister Justin Trudeau are seeking to turn the G-7 into a venue to beat up on President Trump. They hate that he is taking steps to level the international playing field for U.S. businesses and preserve key strategic industries at home.  

Macron and Trudeau will sanctimoniously decry the supposed death of free trade at the hand of Trump. In reality, they are defending a managed trade system that holds the U.S. at a disadvantage.

All of the other G-7 countries have higher tariffs on the United States than we have on them.

For example, France and other EU countries levy a 10 percent tariff on imported U.S. cars, but we only charge a 2.5 percent levy on European imports.

Canada has tariffs of about 270 percent on U.S. dairy products, 70 percent on sausage, and 27 percent on beef, to name just a few.

These counties also have non-tariff barriers to free trade, which include massive Canadian subsidization of its lumber industry that puts American companies at a disadvantage.

It is not a surprise that Europe and Canada want to preserve a trading system that is stacked in their favor and has enabled them to build a huge trade surpluses with the United States.

Macron and Trudeau have promised a tantrum in Quebec over President Trump’s use of tariffs – including on steel and aluminum – which Trump is using as pressure for reform and to signal a different path.

On Thursday night, Macron even threatened President Trump that the summit might end with a joint statement agreed only by six G-7 members to the exclusion of the United States. This threat must have sounded more ominous in French than it does in English.

A U.S. president rightly willing to walk away from an upcoming summit with North Korea’s dictator if warranted is not going to be deterred by the possibility of non-consensus on an irrelevant document that will be forgotten by next week.

Furthermore, if the greatest product of these expensive international confabs is a lowest-common-denominator joint statement – and it often is, despite the massive expense and year of preparation required for each G-7 – then we need to ask whether the G-7 makes sense anymore.

Indeed, a look at this G-7’s agenda after the beat-up session on America reveals the group’s limitations.

Thanks to the guidance of Canada’s leftwing government, for example, the leaders will devote great attention to climate change and gender equality.

Putting Russia back in the mix of members presumably would mean less progressive nonsense and more discussion of actual strategic issues.   

But the other G-7 members seem disinclined to search for common ground with Moscow. And why would they, since we effectively pay for their defense?  Never have these countries been richer than they are today, and – with the exception of Japan – never have they done less for our mutual defense and economic security.

A better path would be to recognize that the G-7 has outlived its purpose. An improved global financial grouping would involve the United States, Japan, India, Germany, Saudi Arabia and the United Arab Emirates – countries with real money and the will to tackle strategic issues in a capitalist framework.

The G-7 will mostly be missed by airlines, five-star hotels and other beneficiaries of diplo-tourism.

Christian Whiton was a senior advisor in the Donald Trump and George W. Bush administrations.  He is a senior fellow for strategy and public diplomacy at the Center for the National Interest and the author of “Smart Power: Between Diplomacy and War.”