mead berger shevtsova garfinkle michta grygiel blankenhorn bayles
The Art of the Deal
Explaining Trump’s Trade Bluster

It’s been a dizzying week for those trying to parse President Trump’s trade policies, with a succession of rapid reversals on NAFTA sending shock waves through the establishment. FT:

Mr Trump said he had been ready to submit a notification with withdraw from the North American Free Trade Agreement “two or three days from now” but had decided against it after speaking to his Canadian and Mexican counterparts.

“They asked me to renegotiate and I will and I think we will be successful in the renegotiation, which frankly would be good,” Mr Trump said, conceding that pulling the US out of the pact that underpins more than $1tn in annual trade and the North American supply chains that many US companies rely on would be a “pretty big shock to system”.

But he added: “If I’m unable to make a fair deal for the United States, meaning a fair deal for our workers and for our companies, I will terminate Nafta.”

Trump’s NAFTA brinkmanship is just the latest in a series of showy populist gestures. In the past two weeks, Trump has signed a “Buy American, Hire American” executive order, ordered investigations into steel and aluminum dumping, dispatched his Vice President to harp on trade deficits in Asia, and threatened a trade war with Canada over its softwood lumber and dairy industries. Are Trump’s protectionist impulses now roaring back, with Steve Bannon and the nationalists taking over the economic agenda at the White House?

Color us skeptical. Tune out the noise, and Trump’s position on trade appears more mainstream than commonly understood. Trade disputes over Chinese steel or Canadian lumber are nothing new; the past three administrations all lodged complaints along these lines. And despite his grandiose threats and symbolic executive orders, Trump has so far refrained from uprooting existing trade arrangements. Trump remains opposed to new multilateral free trade deals like TPP, but he is willing to work within existing frameworks like NAFTA to exploit loopholes and (hopefully) negotiate a better deal.

For all his theatrics, Trump could wind up a moderate on trade, tinkering around the edges of existing trade deals while cutting new bilateral ones with allies like Japan and the EU. Trump is nothing if not a showman; he knows how to capture attention with extreme demands, and he is likely to continue doing so. But so far, Trump’s grandstanding on trade looks like another manifestation of placebo politics: a symbolic affirmation of his working-class base that could resonate with voters without fundamentally changing the system.

That may be a disappointment to the true believers who want Trump to withdraw from NAFTA and the WTO outright, hike tariffs on Chinese steel, and impose that wall-funding 20% tariff on Mexican imports. But there is reason to believe that behind the bluster, Trump’s actual policy on trade might be a more sober one.

Features Icon
show comments
  • D4x

    It’s only “dizzying” if you are reading the legacy media, and still resisting how to think critically, without disdain on style. Must be a way to tear down the echo chambers in the Ivory Towers of Babel.

  • Pait

    I suppose one could simply call the announcement about ending Nafta a lie.

    • Tom

      Wouldn’t that require an actual announcement?

      • Pait

        I suppose we could make exception to the definition of “lie” if they come in the form of tweets, interviews, statements, or other forms of spoken or written word.

        • Tom

          No, sorry, you don’t get to do that. As you should know, there is a difference between “I will do this” and “I’m considering doing this.”

    • Kevin

      I think most people recognize the difference between a lie and a negotiating position. Many of Trump’s voters wanted a tough negotiator to fight for their interests. Attacking him for lying while he’s ostensibly driving a hard bargain with our trading partners makes his critics look like people divorced from reality who aren’t ready to fight for American workers. Trump could be vulnerable to charges that he couldn’t get a better deal, not to charges of using tough negotiating tactics to get a deal.

  • Unelected Leader

    If Trump is even remotely serious about correcting trade imbalances, then he’ll be going after Abdullah Merkel and Xi Jincrying first and foremost. Going after government-controlled Canadian dairy and their limited import policy on top of that is low hanging fruit. Anyone could do it. And it’s not nearly as consequential.

    • Angel Martin

      Actually. Trump has gone pretty hard against Canada on trade. Milk marketing boards are small but softwood lumber is big. But these items have been in play before.

      The new one for us is is Bombardier. Boeing is complaining that the continuous and massive subsidies to Bombardier are a trade issue.

      If Canada, with these small items gets USA trade action.

      It suggests to me that countries with across the board predatory trade practices like Germany, China and Mexico may really get nailed.

      • seattleoutcast

        I think Boeing is throwing stones in glass houses. Its subsidies are also massive. If Boeing wins on this, chalk it up to crony capitalism.

        • Angel Martin

          Maybe so, but the endless bailouts and subsidies to Bombardier are a continual scandal here in Canada (at least outside Quebec)

      • Unelected Leader

        I know he’s come out hard against it, and that’s easy to do when the government tells the dairy farmers how much to produce and then sets the price!
        We will have to see, and I will certainly have to see it to believe it, if and when he actually pursues the big prize and that’s correcting the gargantuan imbalance with China.

  • RedWell

    Agreed: he’ll likely end up with a standard GOP position.

    Trying to read what “Trump” will do, though, misses the point of the dynamics in the administration. Trump himself is basically a hollow vessel regarding policy. He has instincts and preferences, but his management style is to be the storm at the center of the calm. He lets others figure it all out. After some early jostling, it became clear that the nationalists were basically self-destructive and/or bad for the brand and they are increasingly minimized. The mainstream people now carry more weight, in part by default. In any case, again, trying to evaluate what Trump himself will do or is pursuing is not coherent unless you account for the personnel around him. He may not even know that he is undermining himself because people around him make sure everything works out.

    Changing positions on China and suddenly raking Canada over the coals is just Trump spinning his wheels and making noise because that is what he does. The mistake of the media and commentators (like VM, here, and all the Americans casting their two cents) is trying to discern a Trump strategy or pattern. HE doesn’t have one. What we do have, though, is a set of broadly “business conservative” principles and preferences that have evolved over time. Some version of that, with no one exactly in control, will emerge.

  • Andrew Allison

    Cliff Notes: the threat to exit NAFTA brought about offers from Canada and Mexico to renegotiate the terms. Seems like a good negotiating strategy to me.

  • FriendlyGoat

    Ah, “The Art of The Screwover” with “placebo politics”. You agitate the base, confuse the base, double-cross the base——skate, skate, skate until you repeal all of your own taxes. Quite a show.

© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service