Two weeks ago, Steven Mnuchin, the Treasury secretary, declared that the trade war with China was “on hold” and that the United States would temporarily holster its tariffs. The reassuring comments calmed markets and raised hopes that Mr. Mnuchin, one of President Trump’s most enduring and trusted advisers, was winning the internal trade battle that has gripped the White House.
Then Mr. Trump weighed in. In a one-two punch last week, the president doubled down on the trade war with China and threw in ones with Canada, Mexico and Europe for good measure.
.. The scolding laid bare the uncomfortably familiar spot that Mr. Mnuchin finds himself in: trying to be a voice of moderation and a statesman in an administration that sees diplomatic norms and protocols as signs of weakness.
He has so far managed to stay in Mr. Trump’s good graces while advocating a more free-trade approach, but that balancing act is showing signs of strain.
.. Mr. Mnuchin, unflappable in public, is privately making his case with a president
.. The internal tensions boiled over in May during a trade mission Mr. Mnuchin led to China, when he dressed down Peter Navarro, Mr. Trump’s hawkish trade adviser, by reminding him where he stood in the administration’s pecking order after Mr. Navarro confronted him about being sidelined from the talks.
.. Current and former White House and Treasury officials say Mr. Mnuchin has managed to thrive by employing a mix of assertiveness and obsequiousness, staking out his position to the president but quickly changing course to carry out Mr. Trump’s marching orders, even if his message did not win the day.
.. Mr. Trump tweeted that he was going to find a way to help put back in business a Chinese telecommunications company that had been punished for violating American sanctions on Iran and North Korea. The decision blindsided administration officials and lawmakers
.. Mr. Mnuchin, along with the commerce secretary, Wilbur Ross, was dispatched to Capitol Hill to try to calm angry Republican lawmakers and explain the rationale behind allowing the company, ZTE, to remain in business.
.. those close to the secretary say he has learned to appreciate Mr. Trump’s use of the threat of tariffs as a negotiating tool.
.. focused on the president’s desire to see the bilateral trade deficit reduced, rather than emphasizing some of the other trade barriers
.. Stephen K. Bannon, Mr. Trump’s former top strategist, has said that Mr. Mnuchin is in over his head in the negotiations and that he is letting Mr. Trump’s leverage slip away by failing to force China to make major changes to its industrial policy.
.. it was apparent that the Chinese government was trying to elevate Mr. Mnuchin’s role in the negotiations because they see him as the American official most likely to cut a deal.
.. “Among the possible choices, they see Mnuchin as being less hawkish than some of the other counterparts,”
.. populist voices outside the administration have already been heckling Mr. Mnuchin as inept amid reports that the United States was on the verge of making an agreement with China that was viewed as merely symbolic.
.. Mr. Mnuchin has at times found himself the subject of derision, characterized as a fawning banker who cannot tell the president “no.”
.. Last year, the Treasury secretary was scoffed at by economic policymakers from across the political spectrum for insisting that the $1.5 trillion Trump tax cuts would pay for themselves.
.. Mr. Mnuchin told members of the conservative House Freedom Caucus to “vote for the debt ceiling for me.” His plea was met with groans and hisses.
.. Last August, fellow alumni of Yale, where Mr. Mnuchin earned a bachelor’s degree, called on the secretary to resign when he defended Mr. Trump’s handling of racially inspired violence in Charlottesville, Va. A month later, Lawrence Summers, a Clinton administration Treasury secretary, called Mr. Mnuchin the “greatest sycophant in cabinet history” for supporting Mr. Trump’s criticism of football players who knelt during the national anthem.
.. points to his role in successfully steering the Republican tax cut package, which many said would never pass, through Congress.
.. Within the Treasury Department, Mr. Mnuchin has developed a reputation as a micromanager. He resisted choosing a full-time deputy for more than a year, preferring to oversee everything from carrying out the new tax law to overseeing financial sanctions.
.. When the Internal Revenue Service systems failed on Tax Day, the response to the crash was slowed because Mr. Mnuchin was in New Hampshire
.. He had required that any big decisions be cleared by him
.. Mr. Mnuchin’s closest aides describe him as a collegial and mentoring figure.
.. Despite his earnest persona on television, he is known to possess a wry sense of humor
Trump’s Manchurian Trade Policy
Remember “The Manchurian Candidate”? The 1959 novel, made into a classic 1962 film (never mind the remake), involved a plot to install a Communist agent as president of the United States. One major irony was that the politician in question was modeled on Senator Joe McCarthy — that is, he posed as a superpatriot even while planning to betray America.
.. Both the international rules and domestic law — Article XXI and Section 232, respectively — let the U.S. government do pretty much whatever it wants in the name of national security.
.. If the U.S. or any other major player began promiscuously using dubious national security arguments to abrogate trade agreements, everyone else would follow suit, and the whole trading system would fall apart.
.. But Trump is different. He has already imposed tariffs on steel and aluminum in the name of national security, and he is now threatening to do the same for autos.
.. The idea that imported cars pose a national security threat is absurd. We’re not about to refight World War II, converting auto plants over to the production of Sherman tanks. And almost all the cars we import come from U.S. allies. Clearly, Trump’s invocation of national security is a pretext
.. the proposed auto tariffs would further undermine our allies’ rapidly eroding faith in U.S. trustworthiness.
.. Which is not to say that national security should never be a consideration in international trade. On the contrary, there’s a very clear-cut case right now: the Chinese company ZTE, which makes cheap phones and other electronic goods.
.. Yet Trump is pulling out all the stops in an effort to reverse actions against ZTE, in defiance of lawmakers from both parties.
.. China approved a huge loan to a Trump-related project in Indonesia just before rushing to ZTE’s defense; at the same time, China granted valuable trademarks to Ivanka Trump. And don’t say that it’s ridiculous to suggest that Trump can be bribed; everything we know about him says that yes, he can.
.. what we’re getting is Manchurian trade policy: a president using obviously fake national security arguments to hurt democratic allies, while ignoring very real national security concerns to help a hostile dictatorship.
The Meaning of Ryan’s Departure
Paul Ryan’s fate over the past several years is as good an indication as any of how far our politics have fallen.
.. Though the anti-Ryan vitriol faded after Steve Bannon’s defenestration, he continued to be viewed with suspicion by the talk-radio crowd and other arms of Trump Inc.
This was his reward for attempting to drag his party, and the country, toward a grown-up reckoning with our debt. Nearly singlehandedly, Paul Ryan had managed to put tackling entitlements on the national agenda.
.. making incremental reforms now—with no changes for current beneficiaries or those in their 50s—can prevent drastic shortfalls and extreme benefit cuts that will be necessary in just 16 years when Social Security is depleted. The outlook is even worse for Medicare and Medicaid.
But Donald Trump arrived on scene with the supposedly blinding insight that changes to entitlements are unpopular. Well, no kidding. He promised never to touch Medicare and Social Security—not even to ensure their future solvency. And so, the responsible, future-oriented Paul Ryan found himself governing with a backward-looking, whistling past the graveyard president.
.. Ryan and the party he helped to lead also lost its compass on Ryan’s own signature issue—fiscal responsibility.
.. it would have been nice if the party that fulminated about the dangers of deficits in the Obama years had found anything at all to cut—particularly when the economy is growing and unemployment is low.
.. Under Republican guidance, the federal deficit will be roughly double what it was in the final year of the Obama administration.
.. What has Trump taught? That trade wars are the way to improve the lives of the working class? They are popular, at least with Republicans.
.. 65 percent of Republicans favored Trump’s steel and aluminum tariffs.
.. We are not behaving as responsible adults. Our greatest political challenge is out of control debt. Our greatest social challenges are declining families, increasing dependency, and eroding social cohesion. The debt could have been addressed by government.
Trump Looks to Assuage Trade Critics With Farm Package
The aid package, which could climb into the billions of dollars, is still being developed
The Trump administration is seeking to blunt domestic opposition to its trade policies with a relief package for farmers affected by the U.S. trade spat with China, say officials involved in the discussions... Agriculture and congressional officials are examining Depression-era programs like the Commodity Credit Corp., which was created in 1933 to stabilize farm incomes, and which permits borrowing of as much as $30 billion from the Treasury to finance its activities. Using the CCC would also give the administration an existing program to tap, rather than having to devise something new that would need to clear Congress.
.. Many farm groups say they aren’t looking for a handout and would rather have unimpeded trade with China. “Farmers are more interested in negotiation (with China) than mitigation,” said Davie Stephens, vice president of the American Soybean Association and a farmer who raises crops near Clinton, Ky. “Let’s get an agreement where tariffs don’t have to be implemented.