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These are hard times for free trade. On the one side, Donald Trump. He stormed out of the G7 meeting, refusing to endorse even the principle of free trade. In the negotiations over Nafta, he insists on adding clauses that defeat its purpose such as one requiring it to be reagreed every five years. And he has imposed tariffs on steel and aluminium on absurd national security grounds. On the other side, China. It uses trade deals as a tool of political hegemony in Asia, tightly controls its internal markets, and extracts intellectual property from foreign firms doing business there. Stuck in the middle there is the EU which could become the free trade economic superpower were it not for its internal divisions.
How to stop the world from collapsing into a trade war? Push back, push forward, and be patient. Canada, Mexico, and Europe are right to initiate retaliatory tariffs against the US. Bullying has consequences, and it is especially good that these countries are showing a unified front. But it is equally important that countermeasures are proportionate. They must meet like with like, not escalate.
The same applies to China. Its tech companies are keen to expand overseas, often by buying local companies. Regulators should treat these deals with scepticism so long as foreign companies operating in China are treated unfairly.
Next, push on. The world should follow the example of Japan, which went ahead with the Trans-Pacific Partnership trade deal after Mr Trump abrogated it. It is especially key that the EU not let issues like immigration divide it on its commitment to free trade.
Countries outside of the US and China must keep their own houses clean too. When Mr Trump complains about dairy protectionism in Canada, he has a point.
Finally, be patient. The arc of trade history is long. Even if Mr Trump wins again, 2024 is not far away. The multilateral organisations that push free trade, such as the G7, must be kept going, even under duress, until a new day dawns. That is the FT view.