Trump Almost Always Folds

From trade deals to gun control and immigration to military deployments, the president has a consistent pattern: Talk a big game, then back down.

President Trump’s May 8 announcement that he was withdrawing from the Iran nuclear deal should not have come as a surprise. He’d spent years railing against the plan—“the worst deal ever,” he dubbed it—and had promised to rip it up. And yet up to the moment when the president made the final call, there was still some suspense about what he would say.

The New and Not Improved NAFTA

US President Donald Trump has called the United States-Mexico-Canada Agreement, which succeeds NAFTA, “the single greatest agreement ever signed.” In reality, it is not as good as the Trans-Pacific Partnership, from which Trump withdrew the US upon taking office, nor is it particularly better than the agreement it replaced.

Of course, this is Trump’s modus operandi: threaten to do something catastrophic, so people are relieved when things get only a little bit worse. That is what he did with North Korea, when he insulted its leader, Kim Jong-un, and threatened to rain down “fire and fury” on the country. Compared to nuclear conflict, his eventual meeting with Kim seemed like a triumph, even though it produced little actual progress.

.. Trump’s own mischaracterization of that meeting’s outcome – the problem of a nuclear-armed North Korea, he falsely asserted, had been “solved” – is another standard Trump tactic. He callsthe USMCA “the single greatest agreement ever signed.” For Trump, all NAFTA really needed was a new name – one that, as Eswar Prasad points out, literally puts “America First” – to enable him to pretend for his supporters that he achieved something positive.

..The first change is the introduction of two measures pertaining to the auto industry. The agreement requires that, to avoid tariffs, 75% of an automobile’s content originate within North America

.. This will bring some benefits to some American autoworkers, at the expense of everybody else. Not only will consumers face higher costs for autos; the disruption of existing efficient supply chains may even leave the US auto industry as a whole worse off, as it undermines the international competitiveness of North American output.

..The second prominent change in the USMCA is its agricultural concessions, particularly Canada’s agreement to give US producers access to up to 3.6% of its dairy market.

.. But this concession, the equivalent of 0.00003% of US total exports, will have no discernible impact on the US  balance. Trump cannot truthfully claim a victory relative to the status quo he inherited – even to his mercantilist supporters. In fact, Trump’s predecessor, Barack Obama, had managed to wrest similar dairy concessions from Canada in 2015 as part of the Trans-Pacific Partnership, from which Trump withdrew the US immediately upon taking office.

.. Overall, the TPP would have been  than the USMCA

.. in the USMCA negotiations, the US agreed to give Canada increased access to its own dairy market, as well as to two of its other most highly protected agricultural areas: peanuts (and processed peanut products) and sugar

.. The third feature of the USMCA that has drawn the most attention relates to dispute-settlement mechanisms.

.. The fourth notable change in the USMCA is the introduction of a sunset clause.

.. the USMCA must be renewed every 16 years. One hopes that future reviews will take place at times when more sensible leaders are in charge, and perhaps will eliminate the automatic sunset clause.

.. Ultimately, the rebranded NAFTA is a step in the direction of the TPP that Trump so reviled. It is not as good as the TPP, nor is it an overall improvement over NAFTA. But it is better than blowing up trade in North America.

Trump’s Motorcycle Club Revenge

Harley-Davidson wants to live to ride another day. Cue the rage.

When it comes to misguided revenge, Sons of Anarchy has nothing on Donald Trump. The President’s own man-of-mayhem trade policies have forced Harley-Davidson to move some of its motorcycle production overseas. But Mr. Trump responded to this week’s announcement by menacing the company on Twitter Tuesday morning.

.. “A Harley-Davidson should never be built in another country—never!” Mr. Trump raged. “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!” In another tweet, the President added, “Harley must know they won’t be able to sell back into U.S. without paying a big tax!”

.. So the company was left with two choices: Avoid the tariff by moving operations abroad, or pay the new EU tax, which will cost the company $90 million to $100 million each year. Keep in mind that Harley is already paying $15 million to $20 million more for manufacturing this year because of Mr. Trump’s tariffs on metal.
.. Harley is dealing with union backlash for opening a production plant in Thailand while closing one in Kansas City. Harley made that hard call after Mr. Trump withdrew from the Trans-Pacific Partnership last year, though that agreement would have reduced foreign tariffs on American-made motorcycles.
Mr. Trump’s TPP decision made it harder for Harley to compete in the Asian market while still using U.S.-based steelworkers and machinists. Cause, meet effect.

.. We remember how Barack Obama railed against Anthem for raising insurance premiums when Democrats were distorting the health-care market. One might expect that Mr. Trump, supposedly savvier about business realities, would understand how corporations have to make tough choices to survive bad policies. Mr. Trump should rage against the man in the mirror who is the reason for Harley’s choices.

Trump turns the G-7 into the G-6 vs. G-1

February 2016, I warned in an article co-written with economist Benn Steil that “a Trump presidency threatens the post-World War II liberal international order that American presidents of both parties have so laboriously built up — an order based on free trade and alliances with other democracies. His policies would not make America ‘great.’ Just the opposite. A Trump presidency would represent the death knell of America as a great power.”

.. In just the past few weeks, he has taken a giant step toward destroying the global system that the United States created after 1945.

.. Trump has now exited three major treaties — the Trans-Pacific Partnership, the Paris climate accord and the Iran nuclear accord — and thrown into doubt the future of another — the North American Free Trade Agreement — while launching a reckless trade war against our closest allies.

.. Trump continued to push his irrational idée fixe that the United States — the richest nation in the world — has been victimized by its friends.

.. Trump looks like a defendant who has just been found guilty by a jury of his peers.

.. Justin Trudeau did not mince words, calling the U.S. tariffs “insulting” and saying: “Canadians, we’re polite, we’re reasonable, but we also will not be pushed around.”

.. Larry Kudlow accusing Trudeau of a “betrayal” and Peter Navarro saying there’s a “special place in hell” for the Canadian prime minister.

.. No U.S. officials have ever spoken this way about any U.S. ally, ever. These are the kind of words that normally precede military action.

.. Trump seems amazed to discover that the European Union (gross domestic product: $17.1 trillion), Japan ($4.8 trillion), and Canada ($1.6 trillion) — which together produce more than the United States ($19.3 trillion) — will not be pushed around as easily as the contractors he has gotten used to stiffing.

.. add Russia. This was a bizarre suggestion, given that Russia is not only an international outlaw but also an economic pygmy whose GDP does not even rank in the top 10.

.. If the G-7 were to expand, it should include India and Brazil, both democracies that have larger economiesthan Russia’s.

.. invasion of Ukraine — an act of aggression for which Trump perversely blames President Barack Obama — and it has done nothing since 2014 to deserve readmittance. Instead, its meddling in U.S. elections its and war crimes in Syria demand more punishment.

.. Trump is doing precisely what Putin hoped would happen when he helped Trump get elected.

..  A new poll finds that only 14 percent of Germans consider the United States a reliable partner, compared with 36 percent for Russia and 43 percent for China. That the citizens of one of America’s staunchest and most important allies now look more favorably upon our illiberal foes is a testament to Trump’s unrivaled wrecking abilities.

.. none of those disputes called into question the fundamental unity of the West in the way that Trump’s stupid and self-destructive actions do. The Atlantic alliance was born in Canada in 1941 and may well have died there in 2018.

The ‘Good Old Days’ of the Trump Presidency

you can’t have it both ways. You can argue that all of the chaos is part of Trump’s strategy. But you can’t cherry-pick the chaos you like and claim the media is making up the rest.

.. I’ve talked to people in the White House. I’ve talked to congressmen and senators off the record. And I’ve talked to far more people who’ve talked to such people. They all say that things behind the scenes in Trump World are nuttier than Mr. Peanut’s stool sample.

.. Just this week, the president’s body man was ejected from the White House on a freezing cold day, and he wasn’t even allowed to get his coat (presumably, he knows stuff — because he was instantly hired by the Trump reelection campaign).

Trump fired his secretary of State over Twitter.

Roll back the clock another week or two, and you have the sudden resignation of Hope Hicks and the revelation that Rob Porter couldn’t get a security clearance because of credible allegations that he was an abusive husband.

I can’t remember the last time Trump humiliated his attorney general, but it feels like we’re due. There was also some stuff about executing drug dealers and calling Chuck Todd a son of a b****. Oh, and there was that stuff about how trade wars are good.

..  Trump loves controversy but hates confrontation. That’s why he wants to force Sessions to quit

  • That’s why he fired James Comey while the FBI director was giving a speech in California, and it’s why he wanted to
  • fire Rex Tillerson while the secretary of State was in Africa.
  • .. when Democrats are in the room, Trump tells them he’d go for comprehensive immigration reform and preens about how he’d like to “take the guns first, go through due process second.”

.. Recently, people close to Mr. Trump say that he has begun to feel more confident that he understands the job of president. He is relying more on his own instincts, putting a premium on his personal chemistry with people and their willingness to acknowledge that his positions are ultimately administration policy, rather than on their résumé or qualifications for the job.

My friend and chicken-wing consultant Steve Hayes argues that Pompeo is in fact “the real Trump whisperer.” He reports:

“I’ve seen a dozen times when Pompeo has talked the president out of one of his crazy ideas,” says a senior administration official involved in the national security debates.

Let that sink in. It’s not quite as reassuring as it sounds. If Haberman is right, then even if Pompeo had success in the past constraining Trump, he might not be able to going forward, given how Trump is more inclined to let his freak flag fly.

.. One of the great divides on the right these days is over the question of whether the policy wins of the Trump administration occurred because of Trump or despite him.

With the possible exception of Ted Cruz, I don’t think any other Republican would have

  • moved the U.S. embassy to Jerusalem,
  • opened ANWR to drilling, or
  • pulled out of the Paris climate accords and
  • TPP (though I think the TPP move was a mistake).

Most of Trump’s policy successes, however, have been accomplished thanks to party and movement regulars in the administration and in Congress

  • Judicial appointments have been outsourced to the Federalist Society and Mitch McConnell, thank God.
  • Tax reform was Paul Ryan’s baby.

I am generally baffled when people say, “He’s gotten so much accomplished.” From where I sit, so much has been accomplished despite him.

He also gets “credit” for the fire sale of conservative credibility on countless conservative positions and arguments

.. The GOP’s tax-cut message did not have the salience Republicans hoped

.. Trump is increasingly toxic in normally Republican-friendly suburbs. His rallies may energize the GOP base — but they energize Democrats more.

.. Many of his preferred policies and most of his antics divide Republicans, while they unite Democrats.

.. Let’s also assume Mueller doesn’t find evidence of “collusion” that directly implicates Trump but that he does find enough to land Jared, Don Jr., and Michael Cohen in the dock. Paul Manafort is already looking at spending more than two centuries in jail.

What happens when

  • Democrats get subpoena power? What happens when
  • they start drafting articles of impeachment? What happens if
  • Mueller reveals that Trump isn’t really as rich as he claims and that
  • his business is mostly a Potemkin village of money-laundering condo sales? What happens
  • if Stormy Daniels — or the retinue of super-classy ladies reportedly looking to follow her lead — releases embarrassing pictures of the president?

How do you think unconstrained Hulk Trump reacts? Heck, how do you think the beleaguered skeleton crew at the White House behaves? Everyone is gonna lawyer up

Normal administrations are crippled by zealous investigatory committees; is it so crazy to think that Donald Trump might not show restraint?

Might he be tempted to give the Democrats the store to hold off investigations, impeachment, whatever? Everyone defends the Jerry Falwell Jr. caucus on the grounds that they have a “transactional” relationship with Trump. Well, what if other transactional opportunities take precedence?

..  in the next couple of years, a tsunami of tell-all books and more-in-sorrow-than-anger reputation-rehabilitating memoirs will probably come out.

.. “character is destiny.” And I’ve never been more confident that that destiny is coming, and it won’t be pretty.

 

Some Things Are True Even if Trump Believes Them

One of the hardest things to accept for all of us who want Donald Trump to be a one-term president is the fact that some things are true even if Donald Trump believes them! And one of those things is that we have a real trade problem with China. Imports of Chinese goods alone equal two-thirds of the global U.S. trade deficit today.

.. he’s so weirdly obsessed with protecting “manly” industries like coal, steel and aluminum that affect our allies more than China — and he’s built such a chaotic policymaking process and unilaterally surrendered so much leverage to Beijing — that he can’t be relied upon to navigate the China trade issue in our national interest.

.. David Autor, the M.I.T. economist who’s done some of the most compelling research on the impacts of China trade

.. the “shock” that China delivered to U.S. lower-tech manufacturers in the years right after Beijing joined the World Trade Organization in 2001

.. roughly 40 percent of the decline in U.S. manufacturing between 2000 and 2007 was due to a surge in imports from China primarily after it joined the W.T.O.

.. it led to the sudden loss of about one million factory jobs in Ohio, Michigan, Wisconsin and Pennsylvania. Trump won all of those states.

.. This “China shock,” said Autor, led not only to mass unemployment but also to social disintegration, less marriage, more opioid abuse and more people dropping out of the labor market and requiring government aid.

.. “International trade creates diffuse benefits and concentrated costs,”

..  has created identifiable losers in trade-impacted industries

.. We assumed that China would “reform and open” after it joined the W.T.O.,

.. Instead, China “reformed and closed.” So China kept a 25 percent tariff on new cars imported from the U.S. (our tariff is 2.5 percent)

.. China grew its companies behind a wall of protection, fed them with state funds and, when they were competitive enough, unleashed them on the world

..  “Chinese and foreign makers are about to start sending huge numbers of fully built cars to the U.S. We are about to see a big increase in the U.S. trade deficit in automotive in the next several years.”

.. U.S. tech firms, like Apple, that want to offer cloud services to Chinese citizens have to store the data in China on servers operated by a Chinese partner. The U.S. has no such regulation.

.. “if they don’t accept demands to partner with Chinese companies and store data in China, then they risk losing access to the lucrative Chinese market, despite fears about trade secret theft and the rights of Chinese customers.”

.. “no US auto company is allowed to own even 50% of their own factory in China, but there are five 100% China-owned EV auto companies in the US.”

.. American electric vehicle (E.V.) companies operating in China are forced to have a Chinese partner and transfer technology to them.

.. they are also playing by a set of rules that others would be naïve to ignore.

.. So what would a smart American president do? First, he’d sign the Trans-Pacific Partnership trade accord. TPP eliminated as many as 18,000 tariffs on U.S. exports

.. focused on protecting what we do best — high-value-added manufacturing and intellectual property.

.. China was not in TPP. It was a coalition built, in part, to pressure Beijing into fairer market access, by our rules. Trump just gave it up for free.

.. “Since you like your trade rules so much, we’re going to copy them for your companies operating in America: 25 percent tariffs on your cars, and your tech companies that open here have to joint venture and share intellectual property with a U.S. partner — and store all their data on U.S. servers.”

.. Having a really tough trade negotiation with China on manufacturing and high technology, but doing it in secret, makes sense to me.

Starting a public trade war with our allies over aluminum and steel that raises the costs for our manufacturers, that doesn’t protect our growth industries and that loses allies that we need to deal with China makes absolutely no sense.

.. We needed to be, and still need to be, much more serious, and generous, about creating “wage insurance” and community reinvestment policies for people and places whose employers are suddenly wiped out by a trade shock.

.. tax incentives, Pell grants, community colleges — to create the conditions for every American to be constantly upgrading skills

.. Too much of the economic discussion of late “has been focused on the 1 percent versus the 99 percent,” observed Autor. “It’s become a kind of ‘inequality porn’

.. You lose sight of the fact that there is a dramatic rise in the economic return to tangibly acquiring skills — skills that are available and should be within everyone’s reach.”

.. The lack of real meritocracy in our country today, he added, “is not about the returns to realized skills. It is about the inequality in the ability to acquire those skills.

.. If you get educated in America today, and have a good work ethic, you are going to be rewarded.’

.. What does education do? It gives you a skill set and enables you to adapt to change better.

And cities and towns anchored by universities tend to reinvent themselves more easily; they’re engines of adaptation.

Thomas Friedman: Everyone Is Going All the Way

It is hard to spend a week in Israel and not come away feeling that Israelis have the wind at their backs.

  • They’ve built an awesome high-tech industry
  • Regionally, the Arabs and Palestinians have never been weaker
  • Israel has never had a more unquestioningly friendly United States.
  • Trump recognized Jerusalem as Israel’s capital, asking Israel for nothing in return. The Arab states barely made a peep.

this wind has whetted the appetite of Israel’s settlers and ruling Likud Party to go to extremes

.. the “Likud Party unanimously urged legislators in a nonbinding resolution … to effectively annex Israeli settlements in the occupied West Bank, land that Palestinians want for a future state.”

.. Sure, the world would scream “apartheid,” but Israeli rightists shrug that the world will get used to it.

  • Nikki Haley will cover for Israel at the U.N.
  • Sheldon Adelson will keep Trump and the G.O.P. in line.
  • And the Arab regimes, which need Israel to counter Iran, will look the other away.

They think they can annex the West Bank without giving Palestinians citizenship; they’ll just let the Palestinians vote in their own elections.

.. May 17, 1983  .. Israel (backed by the U.S.) imposed virtually all its security demands on a weak Lebanese government, including a framework for normalizing trade and diplomacy.

.. “Going All The Way: Christian Warlords, Israeli Adventurers and the War in Lebanon.”

I always loved that title — going all the way. It’s a recurring theme out here, and it almost always ends with a “Thelma and Louise” moment — partners driving over a cliff — and so it did with Israel in 1983.

.. everywhere I look today I see people going all the way.

  • I see Republicans trashing two of our most sacred institutions — the F.B.I. and the Justice Department — because these agencies won’t bend to Trump’s will.
  • I see Iran controlling four Arab capitals: Damascus, Sana, Baghdad and Beirut.
  • I see Hamas still more interested in building tunnels in Gaza to kill Israelis than schools to strengthen Palestinian society.
  • I see the crown prince of Saudi Arabia with one hand undertaking hugely important steps —
    • moderating Saudi Islam,
    • letting women drive and
    • opening Saudi society culturally to the world
  • and, with the other hand,
    • abducting the prime minister of Lebanon,
    • buying ridiculously expensive paintings and
    • seizing businesses in the name of combating corruption
  • I see the Taliban killing 103 people in Kabul by packing an ambulancewith explosives and driving it into a crowd.
  • I see Houthis, Yemeni warlords, Iranians, Saudis and the U.A.E. all tearing Yemen apart in the name of God knows what.

  • I see Turkey’s president silencing every critical journalist in his country.

  • I see the Egyptian and Russian presidents eliminating all serious rivals in their upcoming elections.

  • I see Bibi Netanyahu trying to derail a corruption investigation by weakening Israel’s justice system, free media and civil society — just like Trump and for the same purposes: to weaken constraints on his arbitrary use of political power.

  • I see an American president threatening to tear up, or actually tearing up, global agreements he doesn’t like —

    • the Iran nuclear deal,

    • Nafta,

    • the Trans-Pacific Partnership,

    • the Paris climate accord and

    • aid to Palestinians and Pakistanis —

  • but without any clear plan or alternative for the morning after that will improve on the status quo.

  • Worst of all, I see an America — the world’s strongest guardian of truth, science and democratic norms — now led by a serial liar and norms destroyer, giving license to everyone else to ask, why can’t I?

Can anything stop this epidemic of going all the way? Yes: Mother Nature, human nature and markets. They’ll all push back when no one else will.

.. How so?

Gaza has limited hours of electricity each day.

Result: Gaza’s already inadequate sewage plants are often offline, and waste goes untreated straight into the Mediterranean.

Then the prevailing current washes Gaza’s poop north, where it clogs Israel’s big desalination plant in Ashkelon — which provides 15 percent of Israel’s drinking water

.. In both 2016 and 2017, the Ashkelon plant had to close to clean Gaza’s crud out of its filters. It’s Mother Nature’s way of reminding both that if they try to go all the way, if they shun a healthy interdependence, she’ll poison them both.

.. then out of nowhere Iranians back home start protesting against Suleimani’s overreach; they’re tired of seeing their money spent on Gaza and Syria — not on Iranians. And, just as suddenly, the biggest internet meme in Iran becomes an Iranian woman ripping off her veil and holding it upon the end of a stick.

.. And if you don’t think markets have a way of curing excesses, you didn’t read the top story in The Times.

.. Watch out for

  1. the market,
  2. Mother Nature and
  3. human nature.

.. One is the relentless product of chemistry, biology and physics; one is the balance between greed and fear; and the third is the eternal human quest for freedom and dignity. In the end, they’ll shape the future more than any leader or party who tries going all the way.