Editor's note: Pieter Cleppe represents the independent think tank Open Europe in Brussels. The article reflects the author's views, and not necessarily those of CGTN.

This weekend, the G7 is meeting in Biarritz, France. Once again, an important topic for discussion will be the potential extra American tariffs. So far, the U.S. has imposed tariffs on solar panels, washing machines, steel and aluminum, hitting China, the European Union, Canada and Mexico, which have been followed by retaliatory tariffs. The new tariffs on Canada and Mexico have meanwhile been lifted, but U.S. President Donald Trump has continued to threaten China and the EU, even stating that "The European Union is worse than China." That's particularly concerning, as EU-U.S. trade signifies the biggest single bilateral trade flow in the world.

These tariffs could not come at a worse time for Germany, which is mired in recession fears. On top of that, there is the risk of a disorderly Brexit.
Meanwhile, in a way, G7 countries seem to be following U.S. President Donald Trump in his zeal for protectionism. Not only France but also the UK is coming up with a so-called "digital services tax." According to one projection, while many U.S. firms would have to pay this tax, only a single French company would have to as well.

The Wall Street Journal has commented: "Rule No. 1 for international economic affairs ought to be 'Don't give Donald Trump a legitimate excuse for a trade war.' French President Emmanuel Macron missed the memo, which explains why Paris is pushing a new digital tax that even the Germans don't want for Europe."

According to estimates, if the U.S. were to follow the same logic as France, at least 17 billion U.S. dollars of services imports from France could be taxed in the U.S. on the same basis.

The whole premise is already wrong: When one looks at the effective overall global corporate tax rate big corporates pay, established manufacturers like Renault happen to pay fewer taxes than Google. Old manufacturers have found ways to suppress their tax burden. U.S. President Trump is, in any case, furious and has threatened to impose tariffs on French wine in retaliation.

On top of that, monetary policy is becoming ever more openly and shamelessly used for the purpose of propping up economic growth in an artificial manner, leading to potential "currency wars," with countries debasing their currency to prop up exports.

Even if history has shown that weakening one's currency does not offer sustainable economic growth, from the days of the Weimar Republic to contemporary Zimbabwe, politicians and many in financial policy circles continue to adhere to the idea. Not least U.S. President Donald Trump, who has been slamming the American central bank for not going far enough with its loose monetary policies, even praising the ECB as a model to follow.

At the G7 level, Trump has upset the consensus, preferring bilateral trade arrangements over multilateral ones. His threats to impose tariffs on German cars have led German Chancellor Angela Merkel to say that Europe "must take our fate into our own hands."

All of these divisions may now lead to the G7 summit ending without a communique, according to rumors. That would be the first time since 1975, when G7 meetings began.

Some have claimed that the G20 summits are overtaking the G7 in importance, also given how the share of the G7's nominal global GDP has dropped from about 75 percent in 1990 to under 50 percent today.

There may be some truth in this, but at the end of the day, the world economy is still very much dependent on the U.S. dollar, while American military supremacy remains unchallenged. Even if the G20 would replace the G7 as the most prominent diplomatic forum in today's world, it is as much centered around the United States. The rise of China and India may, of course, change that one day, but we are not there yet.

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