tpp

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.

This was not merely wishful thinking by the deal’s backers, though it was partly that. It was not only that members of Trump’s team, most notably Defense Secretary James Mattis, had voiced support for the deal. It wasn’t even just that Trump relishes taking the press (and even his own advisers) by surprise.

No, the other big reason that no one could be sure was that Trump almost always folds. Faced with a tough decision, the president has consistently blinked, giving in to his opponents. Trump has mocked former Secretary of State John Kerry for his supposedly poor negotiation powers, argued that multiple past international agreements suffered from weak-kneed diplomacy, and criticized British Prime Minister Theresa May, a close U.S. ally, for her conduct of the discussion on the U.K.’s departure from the European Union.

The president talks a good—or at least aggressive—game, but he doesn’t always walk it. The Iran deal is one of the few cases—which also include ditching the Paris climate agreement, leaving the Trans-Pacific Partnership, and moving the U.S. embassy in Israel to Jerusalem—where Trump has stuck to the hard-nosed approach he promised during the campaign. But he twice flinched on Iran, too. In October 2017, his first chance to walk away from the deal, he made threatening noises but kicked the deal over to Congress and didn’t withdraw. He passed up another chance in January.

Foreign leaders were among the first to notice Trump was a pushover. In the first weeks of his presidency, they angled for face-to-face meetings with the new president, realizing that in personal meetings, especially when subjected to flattery, he could be swayed. The efforts paid off: Trump shared sensitive intelligence with the Russian foreign minister and ambassador. He

backed down from threats to brand China a currency manipulator, and said that

a 10-minute lesson from Xi Jinping on Chinese–Korean relations had convinced him Beijing had less sway over Kim Jong Un than he had believed. That same spring, Trump

called the leaders of Mexico and Canada to announce he was going to pull out of nafta. The two men convinced Trump to agree to renegotiation instead, a significant climbdown.

The pattern has persisted ever since, with two prominent examples in the last three days alone. One was a high-stakes meeting at the White House, centered on the FBI’s reported used of an informant on the Trump campaign. Ahead of the meetings, there was speculation that Trump, who had tweeted furiously about the informant, would demand an unusual inquiry into the Justice Department or force Deputy Attorney General Rod Rosenstein out. Instead, the meeting ended with a plan for future meetings, and the Justice Department’s committing to do more or less what it had already committed to doing.

Meanwhile, negotiations with China intended to forestall a trade war, which Trump previously said would be “easy to win,” wrapped up. The U.S. agreed to postpone tariffs on Chinese imports. The Chinese made some vague promises about narrowing the U.S. trade deficit, but as Keith Bradsher writes, “China gave up little in return, spurning the administration’s nudges for a concrete commitment to buy more goods from the United States, and avoiding limits on its efforts to build new high-tech Chinese industries.”

This is a repeated motif on trade deals. Trump makes a splashy announcement, but when it comes to the details, he pulls his punches. China is not the only target of suggested Trump tariffs. In March, he abruptly announced tariffs on imported steel and aluminum, saying foreign products were hurting U.S. producers. But he has postponed tariffs on the European Union after objections from American allies there, and also postponed tariffs on steel from Canada, the single largest exporter of steel to the U.S. in 2017, because of the ongoing nafta negotiations.

How are those nafta talks going, by the way? Though Trump was nearly as negative about nafta as he was about the Iran nuclear agreement, he shied away from immediately withdrawing last spring, and talks have slowly dragged on. After the administration missed a deadline that Speaker Paul Ryan set for congressional approval of a deal, Treasury Secretary Steven Mnuchin said this week that the process could slide into 2019.

He even has some regrets about withdrawing from the TPP. The Wall Street Journal reported in April that the president had told lawmakers that he had “deputized Robert Lighthizer, the U.S. trade representative, and Larry Kudlow, the director of the National Economic Council, to study the possibility of re-entering the TPP if the terms were favorable.”

Trump is just as apt to fold on other matters. On a June 2017 call with Saudi Arabia’s King Salman, according to The Washington Post, Trump was supposed to scold the Saudis for their offensive against Qatar. After Salman delivered a flattering series of compliments, the president dropped his objections.

In December, when the U.S. announced it would recognize Jerusalem as the capital of Israel, the UN General Assembly voted overwhelmingly to condemn the move. Trump said the U.S. would withhold aid from those who voted for the resolution. “Let them vote against us,” he said. “We’ll save a lot. We don’t care. But this isn’t like it used to be where they could vote against you and then you pay them hundreds of millions of dollars.” Yet when the White House released its budget for 2019, “not a single country lost funding on the basis of voting against the U.S. at the UN,” John Hudson reported. More recently, he made a similar threat to countries that don’t back a joint North American bid for the 2026 World Cup, raising the question of why any country should take the threat seriously.

In January, Trump met with Senate Minority Leader Chuck Schumer with a government shutdown looming. In exchange for Democrats backing funding for increased border security and possibly a wall, Trump agreed to back a deal to replace daca, the executive order creating a legal status for unauthorized immigrants brought to the United States as children. Hard-liners in the White House thought the deal was such a giveaway, in fact, that Chief of Staff John Kelly reportedly called Schumer and torpedoed it.

In February, Trump held a meeting with members of Congress to discuss gun control following the school shooting in Parkland, Florida. He ridiculed lawmakers for being too timid in confronting the NRA and asked them to take up proposals opposed by the group. Days later, he met with the NRA, and when he unveiled his slate of ideas to combat gun violence, it included none of the proposals the NRA opposed.

Why is Trump so apt to fold? One reason is that he is surrounded by advisers who often feel that his ideas are bad and try to talk him out of them. The Iran-deal withdrawal came only after National-Security Adviser H.R. McMaster, who supported the deal, was pushed out and replaced with the more hawkish John Bolton. Beyond that, however, Trump brings two big weaknesses to the table.

First, he’s not as skilled a negotiator as he likes to pretend, and second,

he seldom puts in the time to learn the facts about whatever he’s handling.

In April, Jonathan Swan had an illuminating post about Trump’s one-dimensional approach to negotiating:

President Trump tells people he keeps the world guessing with his wild unpredictability. But those who work most closely with him say he’s a one-trick pony in negotiations.

The trick: Threaten the outrageous, ratchet up the tension, amplify it with tweets and taunts, and then compromise on fairly conventional middle ground.

“His ultimate gamble is: ‘You don’t have as big of stones as I do,’” a source close to Trump told me. “‘You’re going to feel too uncomfortable where I go. The stakes are too high. This is too far outside your comfort zone.’”

This turns out to be an effective tool, because not many people have Trump’s appetite for awkwardness. But if it doesn’t work, the president has few other tools at his disposal, and tends to back down.

Trump is also at a disadvantage because he doesn’t bother to do his homework. The president has strong instinctive views, but little tolerance for studying facts. During the campaign, he said he’d figure out what he needed to know once he won, but since taking office he hasn’t bothered. That means he’s already ceded the debate over reality to his opponents, as when China’s Xi laid out his history lesson on Chinese–Korean relations.

The president’s single negotiating trick and lack of interest in facts threaten to come together to dangerous effect in his upcoming summit with North Korea’s Kim. That is, assuming it happens: The Times reported on Sunday that Trump was starting to get cold feet about it, and he said on Tuesday that the meeting might be delayed beyond the scheduled June 12 date.

Trump has portrayed even the fact of this meeting as a major breakthrough, and evidence that he can get done what other presidents could not. He managed it in part, however, by backing down. In November 2017, he said that North Korea must fully denuclearize before he would consider talks. Pyongyang made no such commitment before Trump announced the summit, though.

Should the meeting come together, however, Trump will be in a high-stakes conversation with Kim. This is risky because, as past experience has shown, Trump is easily susceptible to flattery and other forms of persuasion when meeting face-to-face with foreign leaders. He will also face a disadvantage on the facts. The nuclear program has been central to North Korea’s national policy for years, while for an American president it is just one of scores of important issues, and Trump’s aides say he has made little effort to cram.

“Going into the North Korea meeting, senior administration officials say, the president has been almost singularly focused on the pageantry of the summit—including the suspenseful roll-out of details,” the Associated Press reported Tuesday. “He has not been deeply engaged in briefing materials on North Korea’s nuclear program, said three people with knowledge of the White House efforts.”

This doesn’t mean that Trump will necessarily fold when he meets Kim in Singapore. What makes a summit like this so interesting, and risky, is how unusual and volatile it is. It matches up two leaders who are unusual and volatile themselves. Both have a long history of ostentatious bluster, and spotty records of follow-through. When they’re eyeball to eyeball, it’s an open question which one will blink first, but history suggests it’s likeliest to be Trump.

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 trade 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 better 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.