President Trump's "Alarming" Behavior Towards Our Allies

President Trump’s comment at last week's G7 press conference, that the United States is like “the piggy bank that everybody is robbing,” epitomized what some of his critics call "alarming" behavior towards our allies.

Thank God this president is sounding the alarm! As the saying goes, “With friends like this, who needs enemies?”

Our aggregate goods trade deficit with the EU, Canada and Japan is $240 billion – the equivalent of over one million well-paying American jobs sucked out of our country.

The failure of other NATO nations to live-up to their commitment to spend 2% of GDP on national defense (they spend less than 1.5%) requires the U.S. to lay out an additional $110 billion annually to make up the shortfall. Japan only spends 1% of its GDP on defense. Using the 2% of GDP metric, this is forcing America to pony-up an additional $50 billion per year for Japanese military protection.

That’s a total of $160 billion U.S. taxpayers are incurring in unfair defense outlays for NATO and Japan. That’s almost enough to pay for a private group health insurance policy for all 25 million uninsured U.S. citizens.

Keep in mind, the U.S. spends almost 3.5% of our GDP on defense.

Perhaps this provides a bit of perspective when one hears Bernie Sanders rhapsodize about the wonderful, government-funded universal health insurance in other western nations. He neglects to note that all of them are protected by the bounteous U.S. defense shield. 

And, speaking of healthcare, why do those nations pay far less than Americans for prescription drugs? Because they impose draconian drug price controls - and that's only possible because the U.S., which doesn't have prescription price controls – is the cash cow (or should I say, piggy bank?) for the international pharma industry. Were the U.S. not so stupidly generous, biotech and drug R&D would dry-up overnight.

Let’s focus-in on Canada and Germany, the two G7 countries who’ve been the most visible in feigning apoplexy about President Trump’s demand for a change in the United States-sapping status quo.

The U.S. has an $18 billion goods trade deficit with Canada. And, because of its shortfall against the NATO defense spending obligation, we incur about $11 billion in additional defense expenditures to protect our neighbor to the north. That’s a total of $29 billion per year.

We have a $66 billion goods trade deficit with Germany. And making up for that country’s underspending on defense is costing us $27 billion annually. A total of $93 billion.

So, these two beloved allies are costing our country over $120 billion per year. No wonder Merkel and Trudeau are terrified at the prospect of President Trump bringing things into balance!

Meanwhile, Merkel and other G7 leaders knocked President Trump for supporting re-admission of Russia into the group - at the very time Merkel is pushing a strategically dangerous gas pipeline deal with Russia opposed by the Trump Administration! Perhaps the G7 should be re-christened as the "H7" - for hypocrisy. 

Our $820 billion total annual goods trade deficit almost equals our budget for national defense (including President Trump’s buildup and Overseas Contingency Operations) and the VA, combined. Even after accounting for the U.S. surplus with the world in services (which, as noted in my recent piece on trade and tariffs, provide far fewer well-paying middle class jobs than do goods exports), our country still has a nearly $600 billion trade deficit. 

Where do we get the half-a-trillion-plus to pay for that gargantuan trade gap? Through a noxious combination of borrowing, foregone U.S. domestic investment and selling our valuable assets to other countries. This is the ghastly “balance sheet” to which President Trump alluded in his G7 summit press conference. In addition, our colossal goods trade deficit is having a dreadful impact on jobs, incomes and the health of our citizens.

That’s one hell of an “international order.” To those who continue to minimize this fleecing of America by our "friends," what happened to “believing in data”?